Reference no: EM132762715

Boycott Ltd. is one of the largest insurance companies in Europe. It has enjoyed growth of more than 15% over the last 10 years. The company has used a series of company acquisitions to broaden its type of insurance offerings and has also grown internally to meet the expanding needs of its service market. It currently mainly sells various forms of insurance in the health and life insurance industries.

• However, recently the growth rate has declined amidst increasing competition levels and declining economic conditions. At the same time, the 'lapse rate' (i.e. the number of customers cancelling contracts) has increased significantly.

• Consequently, the company has decided to creat.e a new customer care centre in an attempt to reduce the increasing defection of customers which has largely been attributed to their dissatisfaction with the level of service provided. This new centre will be staffed 24 hours a day for 7 days a week with customers able to ring the one number to obtain service to resolve any issues and to respond to any of their questions. It is expected that at least 90% of problems will be able to be resolved immediately with the remainder addressed in follow-up calls in the next day or two.

Problem 1: What type of responsibility centre would be most suitable to hold the manager of the customer care centre accountable for their activities and performance? Explain!