Reinsurance Trading in Lloyd's of London - balancing conflicting demands and responsibilities
Modern organisations increasingly have to find a balance between competing demands on their operations. A joint study by Cass Business School and Saïd Business School looked at how underwriters with Lloyd's of London successfully meet the conflicting demands of various stakeholder groups.
Modern organisations increasingly have to find a balance between conflicting aims and responsibilities. For example. the health service's primary purpose of providing the best patient care must also be balanced with its need to demonstrate financial accountability, and even profit. To see how seemingly incompatible aims can be successfully combined, researchers at Cass Business School and Saïd Business School conducted a year-long study of reinsurance trading at the venerable Lloyd's of London financial institution. Here, underwriters must balance the need to increase profits and market share with an ability to function as a member of the tight-knit and highly traditional social community of Lloyd's. To focus on one aspect more than the other is potentially damaging. So how do they achieve balance?
The research finds that underwriters have adopted a model that allows them to strike a balance between commercial and community. Rather than there existing an "either-or" prioritisation between conflicting demands, the relationship is transformed into one of "both-and". The following three mechanisms are employed to bring this about:
- segmenting, this is where underwriters perform conflicting duties in different locales, to avoid stirring tension between rival 'stakeholder groups'.
- bridging, which is the method by which the underwriters connect their segemented work, and
- demarcating, the means by which underwriters ensure they do not over-prioritise one set of demands and lose focus on another.
This model allows individual practitioners to meet the demands of 'institutional complexity', the modern challenge of aligning their practices with incompatible 'logics'. This challenge is found in many businesses and sectors, and the research urges leaders to support an implementation of the model discussed to ensure their staff can effectively balance the competing demands they face.
The final draft edition of the research is available for download at the link below.