0% found this document useful (0 votes)
70 views12 pages

Term Paper

Northwestern Mutual is a 157-year-old financial services company headquartered in Milwaukee, Wisconsin with over 350 branches across the US. It has a matrix organizational structure with regional directors overseeing branch managers and financial representatives. The company focuses on building lifelong relationships with clients and prioritizes their needs. Northwestern Mutual has over 20,000 employees and $217 billion in assets. It has a strong company culture emphasized through its physical workspaces, traditions like an annual retreat, and emphasis on training new employees alongside experienced representatives.

Uploaded by

api-273227523
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
70 views12 pages

Term Paper

Northwestern Mutual is a 157-year-old financial services company headquartered in Milwaukee, Wisconsin with over 350 branches across the US. It has a matrix organizational structure with regional directors overseeing branch managers and financial representatives. The company focuses on building lifelong relationships with clients and prioritizes their needs. Northwestern Mutual has over 20,000 employees and $217 billion in assets. It has a strong company culture emphasized through its physical workspaces, traditions like an annual retreat, and emphasis on training new employees alongside experienced representatives.

Uploaded by

api-273227523
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 12

Alex Trinh

PA 420
12/07/14

Northwestern Mutual Organizational Analysis

Introduction:
Organizations are ubiquitous. Not only are they everywhere but also they affect
nearly every part of our lives. Northwestern Mutual is a US financial service founded in
1857 in Wisconsin but now does business in all 50 states and around the globe. Today it
is recognized as a Best Place to Work in 2013 and is a recipient of the Employees
Choice Award by Glassdoor.com. This makes Northwestern Mutual stand alone as the
only company in the industry that ranks in Glassdoors top 50 best places to work. This
organizational analysis of Northwestern Mutual will examine various structural and other
aspects that have contributed to the organizations success.

Organizational Structure:
There are two types of structure within an organization, a formal and an informal
system. The formal system details how the organization runs, how authority and tasks are
divided, and even the physical workspace. Northwestern Mutual is a large organization
with their headquarters in Milwaukee, Wisconsin. There are over 350 branches across
the United States employing more than 20,000 employees. With a little over $217 billion
1

in assets, Northwestern Mutual has 4.2 million clients and yearly revenue of $26 billion,
ranking them in the top 100 of the prestigious Fortune 500.

Northwestern Mutual did not invent mutuality. Over time, however, and
continuing today, our company has become what many point to as a preeminent example
of the power inherent in the mutual form of corporate governance (Northwestern
Mutual, 2013). Northwestern Mutual helps clients achieve financial security and
financial representatives build lifelong relationships with the clients and help them carry
out their financial plans. There are four key values at Northwestern Mutual; doing
whats right for clients, building long-term relationships to meet client needs, building
and preserving financial strength, and offering world-class products and expert guidance
that serve changing needs over a lifetime. These key values are not only important but
they are the companys missions and what drives the heart of the organization.

At Northwestern Mutual there is a Board of Trustees and a CEO, which is chosen


by the board. Chief Executive Officer John Schlifske ranks as the most popular
insurance company CEO in America, receiving a 96% approval rating from Northwestern
Mutual employees and independently contracted financial representatives (Northwestern
Mutual, 2013). From there; there are regional directors, branch managers, and everyone
else is a financial representative. As we learned in class since there are so many branches
spread out but they are all under one organization, the formal authority is arranged in a
matrix structure. All the branch managers answer to the regional directors and the
2

regional directors answer to the CEO versus each individual branch having their own
CEO, regional director, and branch manager. This allows all the branches to answer to
one central branch and that is the headquarters. Since Northwestern Mutual isnt your
typical organization where everyone has a boss or a chain of command they have to
answer to, such as a factory where you have to answer to a line leader and that person
answers to someone else, and so on at Northwestern Mutual everyone has their own
client list and works at his or her own freedom while only having to answer to one branch
manager. Since Northwestern Mutual is a mutual company it operates a little different
than a public company. In this case it doesnt operate for its shareholders but rather for
its clients. Clients are especially important at Northwestern Mutual; they are solely and
directly the focus so tasks are delegated to the financial representatives to do what is in
the best interest of their clients.

To accomplish everything Northwestern Mutual wants to it also needs a great


workspace, which is another part of the formal structure. With over 350 offices spread
across the United States it is difficult to describe the variety in each one. For its
headquarters in Milwaukee, Northwestern Mutual just built a new 32-story building with
over 1.1 million square feet. The brand new building is the epitome of the Fortune 500
model. It is a tall skyscraper made of all glass with a complete modern design. The
building screams big and powerful but the modern design is welcoming and inviting for
both clients and the representatives. This new building has all of the latest and state of

the art technology, which can be very complex but it also has the opportunity to make
every task much simpler. Aside from the high end technology the new building features
a workspace that offers optimal space for both work and social interaction. There are
several conference rooms and business centers, which are important for conducting
meetings and meeting with prospective clients. There is a huge commons area that is
completely open for people to interact socially with each other and there are also several
cafes and restaurants for people to relax and spend time with one another. The physical
workspace allows Northwestern Mutual to successfully work and socially interact
together, creating an excellent culture and work environment one for the reasons it is a
top place to work, as stated to earlier.

Which brings us to the second form of structure and that is the informal side. The
informal structure refers to not how the organization runs from a business standpoint but
how people within the organization interact, also referred to as the culture. An
organization has both visible and invisible aspects to its culture. Northwestern Mutual
happens to have a well-established visible aspect and that is the logo or symbol. Most
people recognize or know Northwestern Mutual when they see that giant white pillar.
The pillar is modeled after Greek architecture and the well know Parthenon. The pillar in
Greek architecture represented power and order, which Northwestern Mutual wants to be
associated with. Another visible aspect that Northwestern Mutual has is their partnership
with the NCAA. The advertising they receive during sporting events help people to

identify Northwestern Mutual, so that is another great aspect. College sports are more
than an advertisement or how the organization conveys itself to the outside but they are
much more. Northwestern Mutual is a huge supporter to college athletics and sports are
apart of their culture. One last example of visible culture would be their buildings. The
buildings themselves are part of the culture where employees and clients can both interact
and conduct business. An example of an invisible aspect would be stories. Every
organization has a history and stories about them. Most people hear about Northwestern
Mutual through friends or family or coworker and it is the stories people tell about how
great Northwestern Mutual is or their experience with Northwestern Mutual that keeps
people coming and a large way people associate with Northwestern Mutual.
Northwestern Mutual also has a tradition of a 4-day retreat the week before Christmas.
This tradition embodies the culture by getting everyone together outside of work by
interacting and having fun. All of these perpetuate the culture of the organization.

Northwestern Mutual is viewed as a leader in its industry and as a great


organization of which to be part. Northwestern Mutual is one of the Worlds Most
Admired life insurance companies in 2012, according to FORTUNE magazine
(FORTUNE magazine, 2012) and Its financial representatives are some of the most
satisfied in the industry, according to J.D. Power and Associates' 2012 U.S. Financial
Advisor Satisfaction Study. Thats why Northwestern Mutual is constantly hiring new
financial representatives in a growing industry and also looking for new interns every
year. The new members of the organizations are thrown right in to the ring and expected
5

to start doing the same job as everyone else from day one. They have a very unique
training system where a new employee gets to work hands on with someone who has
already been doing the job for years. They put new members through a day in the life of
a financial representative where new members do everything that someone who has been
there for 30 years does. New members get to go out into the field and experience the job,
as it should be see. The unique training and development program Northwestern Mutual
offers ranks in the top 125 best training programs along with their internship that has
been ranked in the top 10 for 14 consecutive years. At Northwestern Mutual everyone
does the same job whether theyve been there 1 year or 50 years, everybody is welcomed
into the organization and the culture is further perpetuated.

The Organization in Action:


Northwestern Mutual is a financial services organization along with its focus on
financial planning; Northwestern Mutual offers life insurance, long-term care insurance,
disability insurance, annuities mutual funds, and employee benefit services. On top of
everything offered they also provide consultation on asset and income protection,
personal needs, investments, estate planning, trusts, business needs, and retirement. With
all the services offered Northwestern Mutual not only have individual clients but they
also have corporate clients.

Northwestern Mutual uses many tools to help them provide its services. The
main tool that Northwestern Mutual uses is a software program. Much like engineers use
6

programs to design something, Northwestern also has its own specific software. The
software program takes all the necessary information into account and helps the financial
representative provide the client with options. With technology being the main tool for
the organization, Northwestern Mutual is very adapted to the changes in technology. The
one constraint of the organization to technological possibilities is the fact that they have
so many office buildings; it can be tough to make them all uniform and up-to-date on the
same technology.

All of the organizations on a broader level are reached through the board of
trustees. While on more specific decisions, they are based on what the client wants and
needs so those decisions are reached through all the financial representatives. To
continue the success of their financial representatives it is rather simple. Northwestern
Mutual is commissioned based meaning how much they make is based on how much they
work or in this case how many deals they close and if they dont close any deals they
dont get paid. Different jobs offer different incentives, some people are drawn to base
needs such as money and others are drawn to higher needs Northwestern chooses to use
money as a very powerful incentive to keep its members committed. But they also have
a rewards program called the Power Of and based on how many deals a financial
representative closes they can earn certain prizes such as custom suits and vacations.
Perhaps the biggest motivator is being able to have the flexibility to work where you
want and when you want together with running your own network. With the way the
work world is evolving this is both appealing and challenging to some.
7

All organizations need to communicate to its employees and since Northwestern


Mutual has so many branches spreads across the US internal communication is usually
sent via email or newsletter from the board of trustees. External communication however
is handled at every level of he organization. One form is through their financial
representatives and the representatives following the organizations values and doing what
is in the best interest of their clients. Other forms come from government regulations or
corporate partnerships. External communication happens from the highest level of the
organization all the way down.

Organizational Environment:
The financial service industry is a booming industry and it is constantly on the
rise. Northwestern Mutual ranks first in its industry and 17th overall among service
companies in Selling Power Magazines annual 50 Best Companies to Sell For Now
list, according to the November 2012 issue (Northwestern Mutual, 2012). The external
environment for Northwestern Mutual is very complex. Since the organization is a
financial service industry covering so a wide variety of services many things affect the
environment. The economy, the stock market, inflation, and health care are just a few of
the complex things that come into play and affect every aspect of the organizations
external environment.

The key stakeholders within the organization are definitely the CEO the Board of

the Trustees and most importantly, the employees. These are the ones that have all the
say regarding how the organization itself should run. The stakeholders outside the
organization however are just as important. These stakeholders include the clients and
corporate partnerships and everyone else the organization interacts with. Everything the
representatives do should represent the organization but also more importantly what the
client wants. Without the outside stakeholders the organization would have nothing so
they are really the major stakeholders outside the organization.

Northwestern Mutuals competition is a wide range of organizations, since they


handle every aspect of the financial industry they have to deal with other organizations
that do the same and also the organizations that specialize in one specific area. Although
they have lots of competition they also cooperate with many organizations too. The
biggest being FINRA (Financial Industries Regulatory Authority), they oversee all of the
financial industry and have very strict guidelines for rules the organizations had to follow
to even who organizations are allowed to hire. Anyone going into the financial industry
has to not only be reviewed by the organization hiring him or her but also by FINRA. So
Northwestern Mutual and FINRA work hand and hand with each other through not only
the hiring process but many other financial processes. Since they deal with so many
aspects of the financial industry they also cooperate a lot with doctors and other insurance
agencies to see if certain people are insurable. For example if someone wants to get life
insurance they look at a couple different things; age, health, and risk are the main ones.

So if someone of high age wants life insurance it is riskier than someone who is younger
so they would have the person go and see a doctor to get an idea how risky the client
would be. They also work a lot with brokerage houses and deal a lot with the stock
exchange and they even deal with lawyers and funerals. So they have both a lot of
competition and cooperate with many organizations.

Everything about Northwestern Mutual is connected to the outside world. The


products they serve from life insurance to wills and estate planning. Their products are a
huge connection culturally and socially even economically. Aside from their products
Northwestern Mutual also donate, they have donated over 260 million dollars nationwide
and have their own program to help fight child cancer. Not only does the organization
contribute its employees do also, last year alone Northwestern Mutual employees donated
over 30,000 hours to volunteer efforts. Northwestern Mutual is connected to so many
peoples lives in so many different ways.

Organizational Effectiveness:
Success at Northwestern Mutual is earned two different ways. One is based on
performance since financial representatives at Northwestern Mutual work on their own
with their own separate network. So to be successful financially it is based on
performance and how large your network is. The second is success within the
organization, which is earned. People that have been there for 20 plus years and have the

10

respect of everyone and have help countless people, which are the true successes in the
organization.

The organization is successful for many people, individually probably the most.
There are unlimited possibilities at Northwestern Mutual there is no limit to how much or
how well you can do it is all based on how hard you work and how many deals are
closed. So individuals can be very successful at Northwestern Mutual but the
organizations can also be a success for its clients since it is in the financial industry and
helps people with their financial security. But the organization wouldnt be successful if
it wasnt for its employees so it works both ways.

Lastly the only improvements I see for this organization would be to help more
clients. I would like to see every person have financial security. That is much easier said
than done. Another improvement would be to make all the office buildings more
uniform and model all of them after the headquarters. Other than that this is a very
unique organization in every aspect and I think it works perfectly for what they are about.
The suggestions would only merely improve what is already a great organization.

11

References
Glassdoor an inside look at jobs & companies. (2014, January 1). Retrieved December
8, 2014, from http://www.glassdoor.com/index.htm
Northwestern Mutual Life Insurance and Financial Services. (2014, January 1). Retrieved
December 8, 2014, from http://www.northwesternmutual.com
Rankings. (2014, January 1). Retrieved December 8, 2014, from
http://fortune.com/rankings/
The Parthenon. (n.d.). Retrieved December 8, 2014, from
http://academic.reed.edu/humanities/110Tech/Parthenon.html

12

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy