JTT Insurance Case Study: Strategic Change and Leadership Challenges

This assignment analyzes a case study of JTT Insurance Corporation, focusing on the leadership of Don Linker and his efforts to implement organizational change. The case examines the challenges of transforming a company with low morale and an authoritarian management style. The assignment requires an integrated essay addressing the forces driving and restraining change, evaluating Linker's success, and providing recommendations for future actions. Additionally, the assignment includes essays on global vs. multi-domestic strategies, and the relationship between strategy and organizational design. A bonus question explores Apple's control system design. The analysis delves into issues of leadership, strategic management, employee relations, and the impact of feedback mechanisms within a corporate setting. The assignment seeks to evaluate leadership effectiveness, strategic decision-making, and the complexities of organizational change within the insurance industry.

PART I: Read the following case study carefully and analyze it by
answering the three Questions for Discussion in an integrated essay
format. (50 points)
Please read the following case carefully and write an integrated essay (no less than 3pages in
length) based solely on the information provided in the case. You should not discuss this
assignment with anyone - group collaboration is not permitted.
JTT Insurance Corporation provides automobile insurance throughout the southeastern
United States. Las year a new president was brought in by JTT’s Board of Directors to improve
the company’s competitiveness and customer service. After spending several months assessing
the situation, the new president introduced a strategic plan to improve JTT’s competitive
position. He also replaced three vice presidents. Don Linker was hired as vice president of
claims, JTT’s largest division with over 1500 employees, 50 claims managers and 5 regional
directors.
Don immediately met with all claims managers and directors and visited employees at
JTT’s 50 claims centers. As an outsider, this was a formidable task, but his strong interpersonal
skills and uncanny ability to remember names and ideas helped him through the process.
Through these visits and discussions, Don discovered that the claims division had been managed
in a rather authoritarian, top-down manner. He could also see that morale was extremely low
and employee-management relations were guarded. High workloads and isolation (claims
adjusters work in tiny cubicles) were two other common complaints. Several managers
acknowledged that the high turnover among claims adjusters was partly due to these conditions.
Following discussions with JTT’s president, Don decided to make morale and
supervisory leadership his top priority. He initiated a divisional newsletter with a tear-off
feedback form for employees to register their comments. He announced an open-door policy in
which any claims division employee could speak to him directly and confidentially without
going for their his/her immediate supervisor. Don also fought organizational barriers to initiate a
flextime program so that employees could design work schedules around their needs. This
program later became a model for other areas of JTT.
One of Don’s most pronounced symbols of change was the “Claims Management Credo”
outlining the philosophy that every claims manager would follow. At his first meeting with the
complete claims management team, Don presented a list of what he thought were important
philosophies and actions of effective managers. The management group was asked to select and
prioritize items from this list. They were told that the resulting list would be the division’s
management philosophy and that all managers would be held accountable for abiding by its
principles. Most claims managers were uneasy about this process, but they also understood that

the organization was under competitive pressure and that Don was using this exercise to
demonstrate his leadership.
The claims managers developed a list of 10 items, such as encouraging teamwork,
fostering a trusting work environment, setting clear and reasonable goals, and so on. The list
was circulated to senior management in the organization for their comment and approval and
sent back to all claims managers for their endorsement. Once this was done, a copy of the final
document was sent to every claims division employee. Don also announced plans to follow up
with an annual survey to evaluate each claims manager’s performance. This worried the
managers-but most of them believed that the credo exercise was a result of Don’s initial
enthusiasm and that he would be too busy to introduce the survey after settling into the job.
One year after the credo had been distributed, Don announced that the first annual survey
would be conducted. All claims employees were to complete the survey and return it
confidentially to an outside consultant who would compile results for each claims center
manager. The survey asked the extent to which the manager had lived up to each of the 10 items
in the credo. Each form also provided space for employee comments.
Claims center managers were surprised that the survey Don had promised a year ago
would be conducted, but they were even more worried about Don’s statement that the results
would be shared with employees. What “results” would employees see? Who would distribute
these results? What happens if a manager receives poor ratings from her/his subordinates?
“We’ll work out the details later,” said Don in response to these questions. “Even if the survey
results aren’t great, the information will give us a good baseline for next year’s survey.”
The claims division survey had a high employee response rate. In some centers, every
single employee completed and returned the form. Each report showed the claims center
manager’s average score for each of the 10 items and how many employees rated the manager at
each level of the five-point scale. The reports also included every comment made by employees
at that center.
No one was prepared for the results of that first survey. Most managers received
moderate or poor ratings on the 10 items. Very few managers averaged above 3.0 (out of a total
of 5) on more than a couple of items. This suggested that, at best, employees were ambivalent
about whether their claims center manager had embraced the 10 management philosophy items.
The comments were even more devastating than the ratings. Comments ranged from mildly
disappointed to extremely critical of their claims manager. Employees also described their long-
standing frustration with JTT, high workloads and isolated working conditions. Several people
bluntly stated that they were skeptical about the changes that Don had promised. “We’ve heard
these promises before, but now we’ve lost faith,” wrote one claims adjuster.
The survey results were sent to each claims manager, the regional director and employees
at the claims center. Don instructed managers to discuss the survey data and comments with
their regional manager and directly with employees. The claims center managers, who thought
employees received only their managers’ average scores, were shocked to learn that the reports
also included individual comments made by employees. Some managers went to their regional

directors, complaining that revealing the personal comments would ruin their careers. Many
directors sympathized, but the results had already been distributed to employees.
When Don heard about these concerns, he agreed that the results were lower than
expected and that the comments section should not have been shared with employees. After
discussing the situation with regional directors, he decided that the discussion meetings between
claims managers and their employees should proceed as planned. To delay or withdraw the
reports would undermine the credibility and trust that Don was trying to develop with
employees. However, the regional director in that area attend the meeting in each claims center
to minimize direct conflict between the claims center manager and employees.
Although many of these meetings went smoothly, a few created harsh feelings between
managers and their employees. The source of some comments was easily identified by their
content, and this created a few delicate moments in several sessions. A few months after these
meetings, two claims managers quit and three others asked for transfers back to non management
positions in JTT. Meanwhile, Don wondered how to manage this process more effectively,
particularly since employees expected another survey the following year.
DISCUSSION QUESTIONS:
1. Identify the forces pushing for change and the forces restraining the change effort
in this case.
2. Was Don Linker successful in bringing about change in this organization? Give
reasons for your answer.
3. If you were advising Don Linker, what would you suggest that he do now?
Write an Integrated Essay addressing all three questions. Papers should be
3 pages in length, typewritten, with 1” margins on all sides.
PART II: Answer each of the following questions. Write a 1 page
essay for each question. Your paper should be typewritten, with 1”
margins on all sides. (25 points each)
1. Distinguish between global and multi-domestic strategies. Under what industry
conditions will each be appropriate?
2. Should the choice of strategy follow the choice of organizational design, or vice
versa? Give reasons for your answer.

PART III: BONUS QUESTION - no credit off for incorrect answer,
up to 5 points for correct answer.
**** What steps has a company like Apple taken to design a control system for
their organization?