AMP Limited: Organizational Background and Role in the Market System

Running Head: MARKETING SYSTEM
MARKETING SYSTEM

MARKETING SYSTEM2
Table of Contents
Organizational background........................................................................................................2
The Role of the Organization within a Market System..............................................................2
Key opportunities for the organization......................................................................................3
Recommendations......................................................................................................................3
References..................................................................................................................................5

MARKETING SYSTEM3
Organizational background
The selected organization for this research is AMP limited which is a financial service
company of Australia as well as New Zealand. They offer a lot of products and services
ranging from superannuation and investment products, banking products, insurance, financial
advisors and home loans too. The Australian Mutual Provident Society (AMP) was formed in
1849 basically as a non-profit mutual society and life insurance company (Keneley, 2015).
However, in 1998, the company was demutualised and it came to be listed in the Australian
and New Zealand stock exchange. It was noticed that AMP had the most number of
registered shareholders and a majority of the shareholders belonged from Australia and New
Zealand (Layton, 2007). This was mainly because at the time of demutualisation all the
policyholders got shares in the new organization. Finally, in the year 2003 AMP decided to
demerge their UK operation and the Henderson Group was created.
Finally, on 20th April 2018, the CEO of AMP resigned from his position and it was
revealed in the Royal Commission that AMP used to charge their clients for financial advice
which was actually never provided and mislead the Australian security and investment
commission on various occasions (Keneley, 2018). It hugely AMP and about 1 billion dollars
of market value were stripped from their shares.
The Role of the Organization within a Market System
After the shady operations of AMP got revealed they had suffered from huge losses as
per their share stocks. The struggling chairman announced that the shareholders had to face
more difficulties because of the changes in the legislature and the group recorded for an
outflow of more than 5.5 billions over the last 12 months (smh.com.au, 2019). This hardships
made AMP to release their quarterly report ahead of their time in a meeting in Sydney and
made efforts to explain their disastrous year. Some of the reasons of the losses were due to
the selling of their life business to the Resolution Life for a very low price and remediating
their customers for a worth of $800 million because of the wrong charges they made to their
customers.
In a recent meeting, the newly appointed chairman David Murray had announced that
AMP had lost their stakeholders, employees and even their financial advisors after the
horrific incident at the banking royal commission. This resulted in a very negative impact on