Outline
The article that has been selected for this paper is an article titled ‘Liddy Steps Down as AIG Revamp Reaches New Phase’ by Stephen Bernard which was published in the Toronto Star on May 22, 2009. The article depicts the news that Edward Libby has resigned from his position as the chairman and the CEO of the AIG Group while the company is striving to survive the recessionary pressures while being backed by the government with $85 billion worth of lifeline.
The author highlights the major decisions and plans that need to be made about the succession of the CEO, the appointment of new management, the decision of AIG spin-offs, Sale of assets, and those about the settling of debts to decrease costs while also making the business leaner and more efficient to operate in the current business environments.
The following paper discusses the paper from the aspect of how planning and management play a role in the future of the AIG group in the current times as depicted in the article
Discussion
The article by Bernard highlights the stepping down of the CEO for AIG Edward Liddy from his position. In the article, the author points out the responsibility that has been left to the following CEO for aiding AIG to recover through the recession and the importance of planning for the future in uncertain times like the ones being faced by the AIG group in the current market environment The chapter eight of the book stresses on the aspect of planning in the business, the important role that it plays and the tools and techniques that are used by the management to plan for a business. The following depicts the management planning concepts that are touched upon by the author in his article
The article highlights that the AIG Company has changed a lot since it was bailed out with a lifeline eight months ago by the government. As a result, major changes have taken place about selling off its assets. However even now to survive the company needs to decide how to own a majority of its stakes, create spin-offs in the form of AIA group and AIU Holdings as well as create a new management team while inspiring new leaders to work through the recession and emerge as a survivor.
This highlights that the objectives of the company have been set as per the planning process hw0ever the CEO and the senior management still need to determine where they stand with the objectives and how strategies need to be developed to implement the action plans that can help the company survive.
The article highlights that the old management at AIG including Edwards Liddy would have somewhat restricted the initiatives that need to be taken to allow the company to become efficient even in the recessionary market. The author mentions “with a major shake-up among its decision makers, new management will have the opportunity to continue with Liddy’s plan to further reshape the company, or put their own stamp on how to create a leaner, more efficient AIG.” (Bernard, 2009)
Therefore the new management at the AIG group will have to work towards making the company leaner and efficient through a combination of control; and flexibility. This is one of the effects of good planning as it improves the performance of the management that is ultimately reflected in the performance indicators of the company.
The article also provides that strategy, as well as short-term plans and decisions, are required that can pave way for the future of the company. The strategic plans are those which may need considerable time to plan upon and decide as they are future-oriented and have along with term effect on the operation of the business. The tactical or short-term plans however are for immediate effect and are used to implement the strategic plans and initiatives.
The strategic plans that have been depicted in the article for consideration by the management at the company pertain to structural development plans aimed at changing the mindset and the management style of the management to make the company more efficient and leaner for reducing operational costs and wastage. The purpose of the strategic plans and initiatives is to enable the AIG Group to survive the recession while firmly reestablish itself in the markets.
The operational or tactical plans/decisions that need to be taken by the company with immediate effect pertain to the selection of a new CEO, the sale of assets to repay the government, and the spin-offs of AIG Group for supporting the business while branching into other markets.
Another aspect of planning that is touched upon in the article pertains to a type of business planning tool also known as organizational policies. In this regard, the succession policy for the post of CEO is in question. The board and the management of the AIG group need to act upon its present plans for the succession of the CEO for the business to continue and to aid the implementation of the guidelines put in place by Liddy to help AIG recover from its current state.
Observations
The decision taken by Edward Liddy to resign from his post at a time when the company and the markets are facing recessionary pressures makes the company vulnerable to even the slightest changes in the environment. However, based on the progress of the company since it received government support eight months ago the resignation of Liddy can be seen as foresight as well as a detachment from the issue. On one hand, Liddy has left the company at a time when string support and guidance are required, leaving the future of the company somewhat bleak and depicting signs that the company might be facing imminent failure.
However on the other hand it also brings a ray of hope as maybe the new management that would take effect would be much more apt and capable of aiding the AIG group to recover and fight through the recessionary pressur4es and survive in the long term. The final verdict however rests with the performance of the company in the next few months based on the current as well as new plans that are turned into actionable initiatives.
References
Bernard, S., (2009), Liddy Steps Down as AIG Revamp Reaches New Phase, Toronto Star. Web.