Saskatchewan Government Insurance - Case Study Example

Saskatchewan Government Insurance Introduction Saskatchewan Government Insurance is a government-owned insurance that was started in 1945. The Saskatchewan Government Insurance has a long history and has gone through various changes since it was started. To begin with, it was started as a way to help the residents of Saskatchewan to have their own insurance services that were locally services (Sexty, 1982). Prior to the founding of Saskatchewan Government Insurance, the Saskatchewan County was dependent on insurance that from companies that were outside Saskatchewan and this was seen as a disadvantage to the county. Moreover time, there was no government insurance and all the insurance provision was done by private firms. As a result, Saskatchewan Government Insurance was started to serve two major purses with regard to providing insurance services. To begin with, there it was supposed to offer residents with a way to access government provided insurance and thus protect the people from the capitalist exploitation by private firms. Secondly, it was geared towards making sure that Saskatchewan County has insurance of its own and thus help it to be able to have a way to access insurance in a more accessible way. Since its inception, a lot has changed. For instance, Saskatchewan Government Insurance does not only offer insurance services to residents of Saskatchewan alone, it offers the services all Canada. It also offers a wide range of insurance starting from more insurance to home and casualty insurance. In its beginning years when it started expanding to other districts within Canada. As Johnson and Proctor (2004) say, it was resisted by other districts, by them refusing to recognize it as insurance for automobile insurance. As a result, if a driver through was insured with Saskatchewan Government Insurance was involved in an accident, he would be dealt with as if he or she did not have insurance coverage. However, Saskatchewan Government Insurance has come to be one of the main government-run insurance in Canadian and it has grown enough to be the biggest employer in most Canadian districts (Warnock, 2005). Saskatchewan Government Insurance has a good job for gaining business growth. However, for its future survival, there are some few things it has to look at in order for its to grow. These include the following; Competition Within any business environment, a business must be able to have a way to deal with completion. Within Canada for instance, there are a number of insurance firms in Canada and they are going to provide completion for the business. While Saskatchewan Government Insurance has the advantage of being a government run firm, this does not mean that it cannot be offered enough completion to be kicked out of the market (Quiring, 2004). It is therefore necessary for Saskatchewan Government Insurance to know how to deal with completion. Competing comes in many forms for any business. The most formidable competition that risks the future of any business is the competition for the market. As competition increases due to the high number of business that are being started these days, there is a need for firm like Saskatchewan Government Insurance to have market strategy that will help them to gain more customers and to maintain the ones they already have. Given that Saskatchewan Government Insurance is in the insurance business, this is of high importance because businesses in the insurance industry are known for their ability to repackage their insurance products in order to entice the customers. In this regard, Saskatchewan Government Insurance must be able to come up with ways to create new product packaging for its customers to help them get the products that best suit their needs at any given time. With regard to competition, Saskatchewan Government Insurance has an advantage due to its large business and also because to the fact that it has many decades of experience. Human resources management and leadership Business experts say that one of the most valuable assets for any business sis its human resource. How these resources are managed determines how a business will grow and also whether or not it may fail in the future (Holbeche, 2012). The fact that Saskatchewan Government Insurance has become such a big employer means that it needs to be able to have a good strategy laid done on how to manage its employees. Best HR practices can help a business to have a strategic advantage and this is why Saskatchewan Government Insurance should be able to know how to deal with this issue. A good example of how best HR practices can help a firm to grow can be seen in Google. In this firm, the HR managers have used non traditional approaches to managing their human resources and this has aided the firm a lot by creating an innovative environment. What Google did was to carry out an analysis and find that the most important needs for the firm were. They identified that for their survival in the technology sector, they needed employees who were innovative and creative (Dodgson, Gann, & Salter, 2008). They therefore created a HR strategy that was effective in helping to not only gain (recruit) but to also develop human resources that could help the firm to innovate. Saskatchewan Government Insurance can also do the same for its human rescue strategy. The firm can create a strategy that is in line with its needs and thus help it to be able to work have more chances of success in the future. This can be done by first of all having a critical analysis of most important needs of the firm and them coming up with a HR strategy that will meet these needs. This requires good leadership by the management and the executives who run the firm. As Bjerke (1999) says, leadership is the most important thing in a firm and how leaders look at issues can determine how they are going to be effective in the future. Business ethics The insurance sector has gained a bad name due to some players acting in an unethical manner. As Renn (2012) says, many people feel that insurance companies are just a bunch of conmen who always promise one thing and deliver another. This is especially with regard to how insurance firms are able to meet the claims from the insured. There are two critical issues that come up here; first, there is the issue that it may not be possible for an insurance firm like Saskatchewan Government Insurance to be able to accept all the claims that are placed. This is because the claims have to meet the requirement of the policy that was signed by the customer in order for the clam to be accepted (Cummins & Santomero, 1999). The second issue that comes with this is the fact that some customers will not be as honest as they should be. However, even with these two issues being looked at, there are a number of things that are also at hand with regard to the sector in which Saskatchewan Government Insurance operates. Dishonesty on the part of the many firms who are in this industry has led to many people feeling that there is no honesty at all in the sector. In this regard, it is necessary for Saskatchewan Government Insurance to package itself as a business that appliers ethics in all its operation and that any customer can trust. Insurance, just like banking, is based on trust. Without trust, it can be very hard for business to be carried out (Bibb & Kourdi, 2007). With regard to business ethics, it is necessary to differentiate between ethics and criminal acts. With regard to ethics it refers to the way people act and how they place the interests of other people (Gilbert, 2012). Recent studies indicate that although a lot of people believe they act ethically, they in fact do a lot of actions that are unethical. According to Laasch & Conaway, 2014), although unethical acts and illegal acts are not the same, they are related in some way and so when creating an ethical code of conduct for a firm like Saskatchewan Government Insurance, it can be necessary to look at the various laws that are available. However, even while looking at the law in order to inspire the ethical code of conduct, it is important to note that there are many unethical acts that are not necessarily illegal (Carroll & Buchholtz, 2014). These are the issues that need to be addressed. For Saskatchewan Government Insurance to be able to succeed in the future, it must have a good code of ethics. This code must also be enforced ad the employees must be encouraged at all levels to always apply ethics in their daily work and in decision making. To be able to determine where Saskatchewan Government Insurance stands as of now, it is necessary to and analysis using the SWOT model on the business. A SWOT analysis is one of the theoretical models that can be used to analyze a business and friend out how it stacks against the odds that are available in the market environment in which it operates (Verstraete & Laffitte, 2011). The following is SWOT analysis for the SWOT analysis for Saskatchewan Government Insurance Strengths Saskatchewan Government Insurance has a long experience in the sector and his is a major source of strategic advantage. If the firm can leverage on this, it can have a lot of advantage especially against these new entrants who are coming into the industry. As Singh (2008) says, having a long experience has many advantages. For instance, it means that that the firm has been able to create a trusted brand. After the brand has been used by two or more generation, it becomes a household brand that almost anyone can trust. Building this trust from both existing and potential customer can be a good way to make sure that the firm will have a smooth future. The fact that Saskatchewan Government Insurance is government-owned is also strength for the firm. This advantage manifests itself in a number of ways. First, the fact that is government-run means that the government is not likely to develop policies that will affect it in a bad way. This is very important because government intervention and regulation can have big impact on a business. Secondly, it mean that although it is a for profit firm, profit is not the main driving force and this leaves most of the revenues gained by the firm to be re invested into the business thus offering more growth (Thompson, 2005). Big and therefore able to leverage on that Apart from having a long experience, Saskatchewan Government Insurance is a also a very big firm, operation in the whole of Canada. This sheer size can be an advantage to itself. For instance, it means that the firm is able to have bargaining power over it customers and this is a very crucial thing for any firm. Saskatchewan Government Insurance can leverage on its size to gain a number of strategic advantages. For instance, it can leverage on its big size to diversify into other investments. It can also use this to introduce other products which will not only increase its revenues, but will also increase its market share. This is very important for a business like Saskatchewan Government Insurance. Weaknesses The fact that it is government owned may mean that it does not have enough flexibility to be creative and innovative. As Bidgoli (2010) the modern business can benefit a lot by being flexible. Flexibility, as Sinha (2009) says, makes it possible for a business to be able to react fast to market changes and to meet the needs of the customer that are dynamic and that keep changing over time. However, due to the bureaucracy that is involved in any government-run institution, it becomes very hard for such institutions to be able to achieve the kind of flexibility that can be useful in keeping abreast with market changes. This lack of flexibility can be lethal to a firm like Saskatchewan Government Insurance. Apart from Saskatchewan Government Insurance being a government institution, its big size, although it gives it some strategic advantage also makes it hard to be flexible. According to Hitt, Ireland & Hoskisson (2006), big firms are more likely to be rigid and to sue a formal structure while smaller businesses have a less rigid structure which makes them to be able to respond fast to market shifts. This kind of rigidity by big firms like Saskatchewan Government Insurance can also be a weakness that can be used by the competitors, especially the new entrants to push Saskatchewan Government Insurance out of the market. However, it must be realized that only because big firms have a problem with flexibility does not mean that they cannot achieve flexibility. If they do plan well for it, they can be able to achieve relative flexibility to help them operate in the modern dynamic market. Opportunity Its big size can help in to venture into the global market by investing in international markets such as Europe, USA and Australia. This can be very helpful for the firm. Firms like Saskatchewan Government Insurance have those resources it takes to enter other markets. In this regard, if the firm feels that for the sake of securing its future it needs to enter into a new market, this can be easier for its as opposed to other smaller and newer firms in the sector. The United States for instance can provide a very good market to explore. Threats One threat that Saskatchewan Government Insurance faces if the fact that entry into this industry is not hard. This means that new entrants can enter the market and bring competition the firm. In a modern business, this is a threat to any business and the need to deal with such a risk is always high. There are many insurance firms that are coming up, even with the regulation be the government. These new businesses can have a fundamental impact on the business and it is necessary for Saskatchewan Government Insurance to have a way to deal with this issue. The threat of new entrants is one of the five forces that Porter (1980) identified as the forces that affect business strategic advantage. The hither the barrier to entry, the better for the firm that are already in the market; the lower the barrier to entry, the more disadvantage that such businesses will have. Failure for Saskatchewan Government Insurance to reinvent itself can be dangerous for the firm. Yet, this is a difficult thing to achieve due the fact that this is a large firm that is mostly rigid. The insurance sector has evolved over time and keeps on changing. The necessity to change almost on a daily basis is high for the firms that are in this industry. Failure to change will mean that the new entrant will be able to serve the market in a better way and thus be able to kick the older businesses such as Saskatchewan Government Insurance from the market. Saskatchewan Government Insurance needs to have a strategy on how it can keep reinventing itself in the market in order to avoid a situation where the it is no longer able to serve the market. References Bibb, S., & Kourdi, J. (2007). A Question of Trust: The Crucial Nature of Trust in Business, Work and Life - And How to Build It. New York, NY: Cyan Communications. Bidgoli, H. (2010). The Handbook of Technology Management, Supply Chain Management, Marketing and Advertising, and Global Management. New York, NY: John Wiley & Sons. Bjerke, B. (1999). Business Leadership and Culture: National Management Styles in the Global Economy. New York, NY: Edward Elgar. Carroll, A., & Buchholtz, A. (2014). Business and Society: Ethics, Sustainability, and Stakeholder Management. London, UK: Cengage Learning. Cummins, D., & Santomero, A. (1999). Changes in the Life Insurance Industry: Efficiency, Technology and Risk Management: Efficiency, Technology, and Risk Management. 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