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State Farm Insurance Agency - Essay Example

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“Headquartered in the Illinois flatlands, halfway between Chicago and St. Louis, State Farm has an unusually loyal corporate culture. While its a huge company, with…
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State Farm Insurance Agency
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INSURANCE The current report looks at business communication at Farm, a large insurance company based in the US. “Headquartered in the Illinois flatlands, halfway between Chicago and St. Louis, State Farm has an unusually loyal corporate culture. While its a huge company, with 79,000 employees and more than 16,000 agents, many say it feels more like a family business than a big conglomerate” (State, 2009). The current report looks at problems and opportunities in the organizational communication processes at State Farm, focusing on the internal communication within the company, and highlighting training.
Training is a variable cost for the company. Variable costs of course are costs that can vary, or can be changed with changes in the external environment that is faced by the business. For example, at State Farm, the price of ingredients for a training seminar would be a variable, because the external market, however much State Farm is going to try to control the means of production and supply chain, is still going to show fluctuations in the price of raw materials used to make the training materials. And if there is a pandemic scare US, for example, the demand for insurance is going to go up regardless of whether the market shares are owned by State Farm or not, just because of general conditions of scarcity in the external business environment. Another variable cost for State Farm is how much it pays employees. For example, even though the insurance giant is very rich and powerful, it doesn’t have control over the external factors of inflation and federally mandated wages and benefits, so these costs vary flexibly.
Fixed costs are a different matter, because they are less a reflection of external variance and flexibility and more a reflection of the costs of investment goods that are used by State Farm. These investments are representative of a commitment made by the organization to long term growth over time using these goods, in a commitment that can be profitable for the company in response to how much it can use the investment goods to produce the product that it is selling. An example of a fixed cost for State Farm would be its maintenance of a marketing infrastructure.
In terms of performance, it is assumed in the current report that in terms of relationships between job satisfaction and performance, employees who are trained improperly at State Farm will treat clients differently in a state of burnout and they will have a reduced sense of accomplishment. This may affect the success of the organization adversely. Emotional exhaustion is caused by several factors, and by looking at these factors, managers can add interventions to the program that will help them be better prepared to spot the signs of what may be called employee burnout and take effective measures against it where possible. At organizations generally, the level of bureaucracy between employees is reduced through theoretical stresses that are put on teamwork during employee training. But overall trends differ.
State Farm can also take advantage of new technology to improve business communication. Just because communication takes place over a computer does not mean that it cannot be true communication that benefits the receiver and sender, and also instigates or supports a social connection that is meaningful to both the receiver and sender. People communicate through computers extensively, forming and maintaining social and other types of relationships through a variety of means, including instant messaging, text messaging, web-cam operating, chat room frequenting, emailing, and other uses. None of these various modes of communication are inherently anti-social or anti-emotional, although there are drawbacks in terms of physicality and proximity of the people who are communicating.
State Farm misconduct (2009). http://www.businessweek.com/1999/99_45/b3654189.htm Read More
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