ABSTRACT
Insuro, a profitable health insurance company, melded a Six Sigma program into its service culture. Some prior literature is reviewed. A benchmarking study showed Insuro had high administrative costs, so austerity measures were progressively implemented. Some employees desired shared sacrifice, but the executives wanted performance-based rewards. A “cost-saving paradox” emerged. Work was intensified, quality service was sacrificed, future sales were impinged and employee morale declined. Multiple media leaks were made regarding job cuts being undertaken in close proximity to record revenues being generated, $25 million being budgeted for community gifts, generous compensation being given to the CEO and a large contribution being given to a sports event. A “persuasion paradox” surfaced. The managerial denials that the above subjects were linked only hardened the disgruntled employees’ views. In conclusion, examples show how the official culture, the operating cultures, the formal organization and the informal organization coexisted and were interrelated.
