Eiic

1. How would you describe the growth of Engineering Inspection and Insurance

Company?

Engineering Inspection and Insurance Company was started by Warren Rodman with

initially providing inspection services for local business and to also property insurance

company on request. Soon, Rodman came to the conclusion that he had more opportunity

to make money by securing some financial backing and begin to offer insurance for

equipment belonging to some of his long time clients. The company that resulted grew

rapidly until by 1991, operating through a network of 20 branches and the same year the

company approached $1 billion in total annual premiums. Based on these case facts, it

can be easily derived that the growth of Engineering Inspection and Insurance Company

was very aggressive.

2. What business are they in?

EIIC provides its client property and equipment insurance company in a timely manner. It

inspected and insured industrial equipment such as compressed air tanks and steam

turbines from accidental or physical damages.

3. What is the issue in this case?

In 1991, problems started to sprout within the organization that resulted in decreasing

sales growth and profitability. One of the issues was the increasing employee turnover

rate, specifically among the engineers and underwriters. This was caused due to the rising

sentiment of the employee’s feeling undervalued. Inadequate opportunities for career

advancement among the underwriters further fueled the satisfaction. In addition, there

were growing disputes and conflicts between branch managers and the chief inspectors

due to the ineffective organizational structure. Chief inspectors instead of the bank

managers were making the decision of whether to insure certain risks or not. Also, bank

managers did not have any direct reports, only the chief directors had that privileges.

Another problem was the late delivery of insurance policies. EIIC sets the completion time

for insurance policy within...