HIH保险公司破产案例分析

MGT382

enterprise risk is process , including the risk of distinguish ,balance or control. The aim at diminished losses down and improve business efficiency.

4.3 Financial operation

HIH’s board doesn’t understand the conception and relevance of conflict of interest. During the treatment, the board didn’t publish the interest initiatively and didn’t dispose the problems. June of 2000, a sub company of HIH offered a loan to a real economy which belongs to a strong stock holder Alder of HIH. The company use 4 million Australia to make the lie that all the people thought Alder buy the stock in private made the price of stock fallen. Alder used the other 4 million to purchase private shares of ICT, at last, the investment failed. The last 2 million was lend to Alder without record. Alder was one of the members of HIH’s investment committee. The rules of the committee are the entire boarder should approve the program of loan. But the Alder’s investment hasn’t the processes.

Summary

SWOT analysis

There are five step in strategic management process (John.& Arthur. p.15.): 1. Developing a strategic vision 2. Setting objective

3. Crafting a strategy to achieve the objectives and the vision 4. Implementing and executing the chosen strategy

5. Evaluating performance and initiating corrective adjustments

Top management’s views about the company’s direction in the strategy making are related to the success on the operation. HIH’s board make decision without developing vision. therefore it failure operation in the England in 1993.

In the market of California, HIH paid more than $300 million for its mistake. Because of loss the last step of strategic management which is the trigger point for deciding whether to continue or change the company’s vision, objectives, strategy,

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MGT382

and strategy execution methods. (John.& Arthur. p.28.) The market change by the economic development, and the strategy must change by the market. Going out of the time will go out of the success.

Reference:

Anthony Hughes，March 17，2001, Failure in disclosure，http://www.theage.com.au/

Anna Pha，May 23, 2001, HIH col7lapse: greed and corruption，The Guardian

Bob Browning，2 June 2001, Is the political system for sale?，

http://www.newsweekly.com.au/

Becky Gaylord. (2002.). For Months, Australia Has Had an Enron of Its Own. The New

York

Times.

Retrieved

April.

02.

2011.

From

http://query.nytimes.com/gst/fullpage.html?res=9B01EFDA123EF931A15751C0A9649C8B63&&scp=8&sq=HIH&st=cse

David Elias，5 December 2001, Scheme 'helped keep FAI afloat'，http://www.theage.com.au/，

David Kehl. (2001.). HIH Insurance Group Collapse. Parliamentary Library.

Retrieved

April.

02.

2011.

From

http://www.aph.gov.au/library/intguide/econ/hih_insurance.htm

Ge Yunhua, Xie Zhigang & Wang Teng.(2003.) The case of Australia HIH insurance

bankrupt. Jing Suan Tong Xun. 4(3).

John. E. Gamble and Arthur. A. Thompson.(2009) Essentials of Strategic

Management (2ed.ed.). Australia: Charles Sturt University Wu Jun & Han Keshen

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Wayne Arnold. (2003.). Insurer's Officers Broke Laws, Australian Inquiry Concludes.

The

New

York

Times.

Retrieved

April.

02.

2011.

From

http://www.nytimes.com/2003/01/14/business/insurer-s-officers-broke-laws-australian-inquiry-concludes.html?scp=5&sq=HIH&st=cse

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