About the International Management Problems with the Hih Company

Topics: Management, Insurance, Strategic management Pages: 12 (4099 words) Published: June 13, 2013
Contents
Introduction2
Factor 1 HIH general situation3
Factor 2 Company issues4
Strategy making and execution4
Large-scale expansion5
Acquiring FAI7
The company management structure7
Factor 3 Company operation9
Reinsurance9
Auditor10
Finance11
Risk management11
Factor 4 Strategic opinions12
Professional and concentrated expansion strategy12
Others opinions14
Conclusion15
References18

Introduction
HIH is a famous multinational insurance company in Australia, who has a huge network of company structure, complex management approach and managers. At first for this an international cross-border insurance company, after researching and analysis the whole company background, academic information, can get the collapsed reasons of the HIH insurance company that is about corporate structure, company managers, corporate decision-making, investment, financial and other external causes. The HIH has more problems rather than a single mistake. In the company operating activities, enterprises and their regulatory authorities make a series of activities and measures which breach the ethics, to help them to cover the company operating loss until the HIH finally collapse. These unfair competition activities also get serious harm with social, the company and people. Secondly, as the collapse of HIH insurance company, we should ponder the reasons that lead to the bankruptcy, and the problems that they had made corporate decision-making, the management style and business concept. Finally I boldly envisioned a specialized and centralized strategic decision-making, strategic expansion, and a reasonable structure of the company can make the HIH extricate the management troubles instead of going bankrupt. In my essay which mainly focus on the strategic decision-making and strategic management theory. Strategic management mainly refers to a company and managers make decision-making for the long-term global developmental direction plans policies objectives and adjust resources and the company internal environment.

Factor 1 HIH general situation
HIH Insurance Limited is the second largest non-life insurance company in the insurance market in Australia, and it has always been a giant of the Australian insurance market. The headquarter of HIH is in Sydney, HIH also has many branches and subsidiaries in America, Asia, British and other regions and countries. Raymond of Reginald Williams who is the founder of HIH, occupies an important position in the company and company management, he is a representative figure of the senior management team in HIH Insurance Limited. When HIH found in 1968, during the process of a series of acquisitions and commuting equity activities that make the premium income and total assets increase, and it develops a large insurance bloc which is in order to 29 companies as the main body, totally including more than 250 companies. HIH business scope is very broad, also covering many areas. According to the HIH Insurance Limited’s financial reports in 2000 years, shows that HIH has gross premium income 2.8 billion Australian dollars before the June 2000, total assets of 8 billion Australian dollars, has 7.1 billion in total liabilities and net assets of 900 million Australian dollars. According to statistics, HIH has at least 2 million of the non-life insurance policy and more than 1 million policyholders in Australia, also many Australian listed companies have purchased the policies of HIH Company. In the entire business development of HIH, it mainly take large-scale expansion strategy and take a low rate, high commission, engaged in high-risk business and mergers other company's strategies to achieve their expansion, so as to achieve its market share. One of the typical expansions of M & A event is that HIH acquired FAI insurance company in 1998, but managers...

References: Becky Gaylord. (2002.). For Months, Australia Has Had an Enron of Its Own. Retrieved.from.http://query.nytimes.com/gst/fullpage.html?res=9B01EFDA123EF931A15751C0A9649C8B63&&scp=8&sq=HIH&st=cse
Ge, Y. H, Xie, Z. J, Wang, T. (2003.) The case of Australia HIH insurance bankrupt. Jing Suan Tong Xun. 4(3).
Han, K. S & Wu, J. (2005). The reasons of HIH bankrupt and the lessons. The theory and application of research papers, The people by the China Property Insurance Company (PICC), Beijing, China.
Gamble, J. E & Thompson, A. A. (2009) Essentials of Strategic Management (2ed.ed.). Australia: Charles Sturt University.
Kehl, D (2001.). HIH Insurance Group Collapse. Parliamentary Library. Retrieved from. http://www.aph.gov.au/library/intguide/econ/hih_insurance.htm
Nag, R. H, Chen, D. C, What is strategic management, really? Inductive derivation of a consensus definition of the field. Strategic Management Journal. Volume 28, Issue 9, pages 935–955, September 2007.
Peng, M. W. (2008). Global Strategic Management. America. South-Western, Division of Thomson Learning.
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