Analysing The Performance Of Aegon Group Business Essay

Analysing The Performance Of Aegon Group fear EssayAEGON Group is world leader in fiscal services business which provides life amends, pensions, capacious term savings funds and investment services and products. AEGON Group has 30000 employees and serving oer 40 cardinal customers glob e actually last(predicate)y. AEGON Group provides services and products over twenty five countries globally unite States, United ground, europium and Asia. By 1994 AEGON started relationship with Scottish honorable, which was very popular and hearty cognise name in the United Kingdom as a financial service manufacturing. Scottish Equitable founded in 1831. By 1998 AEGON had taken do it control of Scottish Equitable and Scottish Equitable was re betrayed as AEGON Scottish Equitable in 2006. after two years the Group extended its businesses in the United Kingdom and bought life redress operations of Guardian Royal Ex inter lurch. AEGON main customers ar United States, United Kingdom and Net herland. AEGON withdrew some business from Belgium and Greece, as surface as general redress from the United Kingdom market and healthc atomic number 18 sector from Netherland. The Group alike inter intensify its stake in FGH Bank and merchant bank Labouchere. The result was a more(prenominal) efficient and snap off concentrated memorial tablet. AEGON playing very important role in its markets just non in United Sates, Netherlands and United Kingdom merely as well in stark naked markets of Asia, and central part of the einsteiniumern atomic number 63 as well. AEGON is listed on the stock ex mixtures of Amsterdam, London, New York and Tokyo.Task -1 Explore the background to channel affecting the afoot(predicate) organization.P -1.1 Discuss the background to change that exists in today prudence. switch over is a forcefulnessful issue or an engine that drives many segments of our economy. Mostly forces of change provide us as contractors with parvenu projects to pul p and older buildings to modify or amend. Changing is truly the lifeblood of our businesses and our economy. The forces of change be excessively more discerning and pervasive as its affect our economy, our businesses, our speculates and even our daily lives as well. We might easily recognize changes as go along in physical world of production, yet 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- inwardnessiveness. transfigure is perpetual adoption of organization strategies and structures to ever-changing external environment. Today change is on loss answer in our economies, our businesses, and our lives.Change that exists in todays economyThe competitive pressure forced the changes bring into our economy. There ar several study forces for changes that exist in today economy and financial sectors. These forces areBureaucracyEnvironment changesClimate changeEconomics changesPolitical changesTechnological changesPersonal behaviours changesChanges in turn started the industry globalizationWe can shape incidents in past changes the businesses and economic environment which is responsible for changes exist in current economy.Bureaucracy effect in our organization and economy because management were use imagerys to person require rather than organization objects. grievous bodily harm Weber saw bureaucracy as the most rational and effective mode of organizing the activities of large arrive of quite a little because it ensured decision- make according to general rules rather than the whims of officials, cultivated trained experts, and reduced the possibilities of corruption and nepotism. Weber, M., (1979) Economy and Society, in Journal of an Outline of Interpretive Sociology, Volume 2The global economic crisis that started in the US i n 2007 and spread around the world in 2008 was preceded by large imbalances in global majuscule flows. The economic crisis has changed world economy during the past year al wiz, slowdowns economic process. The IMF says this represents By further the deepest post-World War II recess with an actual decline in out cast off in countries making up 75% of the world economyBBC News. (April22, 2009) (Online). Available at www.bcc.co.ukThe evidence shows that ignoring climate change will eventually damage economic harvest-tide. Our actions over the coming few decades could shit risks of major disruption to economic and social activity, later in this blow 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 nasty or im doable to reverse these changes. Tackling climate change is the pro- proceeds strategy for the longer term, and it can be done in a way that does non cap the aspi rations for growth of rich or pitiful countries. The earlier effective action is taken, the less costly it will be. NICHOLAS stiff, STERN REVIEW THE ECONOMICS OF CLIMATE CHANGE 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 survive this tight metre. Managers across the UK, mean man, chip in accepted their own redundancy as inevitable, according to the Chartered Management Institute. Those constituents are cause to a lot of stress for us all our society and individually.There also In near past the world economy was not good even before September 11.Synchronized growth slowdowns and in the grounds 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 transgress of September 11 have changed the give, increa sing the already significant downside risks to world growthFischer, S., October 18, 2001 International pecuniary 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 new and worrisome trends. At the very least, the balance between political and economic forces has been significantly altered. Because political support for globalization was at high hat shallow while the global economy was in a buoyant state, this suggests the pendulum is now swinging in the opposite handleion. Against this background, two lessons from history are expense 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 in stitutionalized and sinewy reversals la 1930s are not alikely, the downward spiral of protectionism acts fast.Ferry.P.J Santos.I, (March2009). FD Volume46, Number1The technology is posing major contend to todays economy that is cultivation technology. The information technology of the computer and internet services has and will continue 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 superstar mechanisms for promoting economic activities. Its growing importance 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 travel and communication, and migration and remittancesDunning, J. H. (1993) The globalization of Business. Rout directge, London.As Labovitz Rosansky point out personal behaviour Psychologists have long reco gnized that human creations 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 module, management versus labour, field versus corporate, internal versus domestic, East versus West, accounting versus sales- the list goes on. No wonder it so hard to focus people around known goals when they are so different from each other simply by virtue of what they do and where they do it. Specialization and knowledge can be a wedge that drives people future apart and makes it difficult for them to work togetherPrice, A., (2007) Human Resource Management. 3rd Ed, p281Several commentators have drawn attention to the parity with the effects of natural disasters like the Kobe earthquake 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 much depends on the effects on consu mer 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 only we have a strong team to take us forward through the next phase of our development umteen changes affected the AEGON, UK environment in recent years. These are few changesExternal factorsIn the UK, life antepast 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 gold 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 lawfulness investors, such as the UK before 1979, the decline of defined benefit pensions would have been a disaster. The co st and availability of equity capital would have reflected the reduced flow 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 make 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 measurePrivate pensionsThe government pensions were very small and also government want to decrease the habituation 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 cosmos asked by politicians, non-governmental organizations, campaigners, and pressure groups to mobilize 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 search for climate change risks and opportunitiesFalling vales of grantsThe current economic downswing situation affected the company shares values, which reduce the returns 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 reputation in the insurance and pensions industry in recent years.P -1.2 Evaluate the strengths and weakness 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 weakness areas in which it is less strong than the competition. AEGON had historically been boffoAEGON had historically been successful but government imposed price controls had reduced profitability. Compared to its competitors, 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 followers 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 ask /wants at the heart of all developments and to make sure that financial ser vice industry works with customers to fleet them what they want/need and we offer the best products and services from their point of view. Reflecting local knowledge and global powerScottish Equitable is now AEGON Scottish Equitable reflecting some(prenominal) local knowledge and global power. solely the brand names 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 honour themselves on low incomes and, often through no fault of their own, are unable to maintain premium payments. These measures include introducing lower premium payments, grace periods and loans or, in some cases, lessen the coverage offered by a particular policy.WeaknessesThe weaknesses of the organisation are matched to the opportunities and threats 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 precisely to understand. People do not always feel which range of financial products/services they need and also are not sure where to seek support and advice. Wide problems to remain competitiveThe insurance and 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 idea of making consumer certified of the organizational change, it frames organizational development. Generally, the organizational development is considered as a method of arrangement, suitable with the coetaneous 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 t op to bottom level. The company led by its new CEO has new objectives such as delimit 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 purpose of the company was egotism 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 audit to find out the answers of these questions and the result of the audit reveals two moveHow was the company positioned?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 step sSimplify financial service and provide more focus.It was important that consumers understood more precisely what they were purchasing 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 problems.Develop the workforce.The objective was to develop the skills, essential at heart 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 culture may include such thin gs as, confidence to innovation, decisions and trust for production and quality. The model, utilize by new CEO of the AEGON, brought commanding change in the organization and gave new direction to the company.Fundamentally, representation of modify system with regard to the AEGON can be evaluated as followsAnalysing the factor affect the organizationOrganizational surgical procedure 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 jural syst emImpact of the environmentAnalysing the weakness and strength of the organizationA range of organization functions which posit 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 push organizational performance by aligning goals and objectives throughout the organization. I transmitly, employees get key input to identify their objectives, time lines for completion etc. Management by objectives to be effective, individual managers must understand the specific 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? practice on feedback from stakeholders?Mobilize the right resources at the right time to adopt the carry throughation initiative? seduce a critical mass of effort by impacted groups to propel the change?Strength take chancesDr. Baba, M., (2005) Change Management. The Defence Logistics Enterprise. Transforming Organizations in the Information Era. Enterprise Integration GroupCreating new culture in organizationChanging culture in organization helps to betterment organizational objects. Changing 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 some 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 inevitably 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 organiza tion and base of the organization to take aim from its experiences was forms.Task -2 Develop systems for understanding and involving others in the process of change.P-2.1 Identify systems to involved appropriate stakeholders in the ingress 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 go od 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 usually 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 pos itive response.AEGON has launched new and innovative productsAEGON has launched new product 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 truety 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 sleepered this growth to certain behavioursThese ogdoad behaviours areThink customerEmbrace changeEncourage excellenceAct with legalityDecisive actionWork togetherLearn and growRelate and communicateCustomers less sentiency is one another reason of the change in the organization, this was also reason of the government increased task impositions. As result of this, the company was losing customers. Knowledge 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 amalgamation 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 stakehol ders (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 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 lead 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. severally step acknowledges a key principle identified an d people can see changes, feel the changes.These eight stepsIncrease UrgencyAEGON pensions provider has suggested that the issue of the government component part public to put money away for retirement is of greater urgency now than it ever has been. (AEGON UK chief executive Otto Thoresen. 2010)Build the channelize TeamGet the guiding team to create the right vision 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 oblation 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 lot 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 InCommunicate 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, fearEmpower ActionEmpower action mean is a deal effectively with obstacles that block action, especially disempowering bosses, the wrong performance measurement and reward systems, lack 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 wave after wave of change, not stopping until the clear vision is a reality no matter how big the obstacles.Make Change StickChange 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 improved 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 union with AEGON is much stronger. E.g. Scottish Equitable is now AEGON Scottish Equitable thus reflecting local knowledge and also global power.In order