ACC 3511 DECISION MAKING AND CONTROL
SEMESTER 2, 2013/2014
JAYA TAKAFUL BHD (JTB)
The JTB Board of Directors decided to create a Customer Care Centre (CCC) to stem the increasing defection of customers resulting in part from dissatisfaction with the firm’s services. The central idea was to provide private customers with one telephone number to be used for all their questions and problems and for all types of takaful offered by JTB. The CCC would be staffed 24 hours a day, 7 days a week to make someone was always available for the customer. The JTB personnel would be able to address all inquires and handle customer problems 90 percent of the time on the first call. The remaining 10 percent of the problems would be resolved in one day with a follow-up call.
Dani Rahman was assigned as the project manager responsible for the creation and development of the CCC. In developing this center he was tasked to display the kind of entrepreneurial behavior the chairman of JTB was seeking to develop. Mr. Amirul, the energetic and dynamic chairman of JTB seeking to change JTB takaful company from a stiff bureaucracy to a nimble entrepreneurial-driven-firm. The design was to have the center function as a central services profit center supporting the separate takaful business units of JTB.
Dani, a seasoned manager, saw this assignment as a real career opportunity. He began to think about meaningful indicators and measures for success of the center. He was politically savvy and wanted the performance of this center to stand on its true accomplishments.
Background: Product Lines Responding to Declining Growth Rates
JTB was one of the largest takaful firms based in Asia. It had a worldwide operation and was recently acquired by another major takaful company. JTB had enjoyed remarkable growth of more than 25 percent each year over the past 10 years. The firm had used a series of acquisitions to broaden the type of takaful offerings and had also grown internally to meet the expanding needs of its served market. It sold various forms of takaful in the health, life, casualty, property and automotive areas.
Over the last couple of years the growth of premium income in the Malaysia takaful industry had leveled off. In 1993 and 1994, the industry still enjoyed high growth rates and grew at 10.3 percent and 9.5 percent, respectively. By 1995, however, the growth rate had decreased to only 4.8 percent. By 1996 and 1997, growth was flat instead of the planned 3 percent and the expectation was that “growth will only be moderate, if any growth is recorded at all”.
The declining growth rates resulted from a set of reinforcing trends: 1. Worsening economic climate with increasing economic downsizing, increasing unemployed, and stagnating real income. 2. Higher taxes, in part due to the unstable economic.
3. Increasing competition resulting from the deregulation of the Asian market, which was “fully noticeable for the first time” in 1995. 4. Extensive satisfactions of the basic demand for takaful in Malaysia, an area of sustained growth up to 1994.
Despite these worsening market conditions, the operating divisions of JTB were often able to gain market share. However, the squeeze of increasing competition and increasing client price sensitivity led in the private takaful market to shorter contracts and more cancellation of existing contracts. This effect varied in intensity by product line.
In response, product lines and the branch offices began to pay more attention to providing a better service as a way to keep agents, brokers and existing clients satisfied. There was a range of ideas and responses to the problem, varying from remaking newsletters for customers to creating a “Calling Center.” The latter was in response to the complaints of many customers, agents and brokers about the difficulties of reaching clerks and about the level of service they received if and when they could reach them.
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