Honoring a Legacy, Embracing Change

Class activity: Case study (15 marks)
Honoring a Legacy, Embracing Change

We knew that the change needed at ACHS would require more than bringing in a new manager
or two. We were looking to change the culture and introduce a new value system. – Fernán
Gazmuri, President, ACHS Board of Directors
In mid-2010, things were not looking good for Asociación Chilena de Seguridad (ACHS), a
workers’ insurance non-profit corporation.1 Also known as a “mutual,” ACHS provided
member companies with risk prevention services and their workers with free, high-quality
healthcare and, when needed, salary compensation for work-related accidents and illnesses.
ACHS’s accident rates were now rising, even as its financial performance declined. In fact, the
52-year-old organization was losing money for the first time. Workers wanted a better
healthcare experience, and companies wanted better risk prevention services. Meanwhile, as
ACHS coped with its eroding performance, Chile’s new pro- business, results-oriented
president, Sebastián Piñera, was openly communicating his goal of creating a “First World
Chile” by 2020.
ACHS was founded in 1958 by Sociedad de Fomento Fabril (SOFOFA), a federation of private
industrial companies led by some of the best-known businesspeople in Chile. These included
the new company’s CEO, Eugenio Heiremans. During the half-century that followed the
founding of ACHS, Heiremans focused on enhancing the dignity of the Chilean worker by
improving safety and health conditions; he believed in putting the well-being of people ahead
of all else. Now 87 years of age and suffering from a debilitating illness, Heiremans knew it
was time to step down. SOFOFA’s Executive Committee asked committee member Fernán
Gazmuri, ACHS’s newest board member, to set the change process in motion. Finding the right
successor for Heiremans would require a better understanding of how ACHS operated and a
leader who could reverse the organization’s decline in performance while maintaining its
historical commitment to the safety and health of the Chilean worker.
With roughly 4,000 employees, ACHS and its country-wide network of 100 agencies provided
risk prevention services to 38,000 companies, 84% of which had 50 or fewer employees (7.6%
had 50–100, 6.9% had 101–500, 1.5% had 500+), and delivered healthcare and financial
services to two million workers. (See Figure 1 for a breakdown in ACHS industry membership
by company and worker and by industry accident rates.) Among the three private mutuals,
ACHS was the market share leader with 52%; MSCCC and IST had 34% and 14%,
respectively.

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