Allianzkorea

Allianz Korea, Failure of customer focused management

2008-09-10T21:39:00.000-07:00

There was a suspicion of Allianz Life Insurance “using illegally” the customers hundreds of millions by People’s Solidarity for Participatory Democracy in the mid of April 2008. Key issue is that the company sold the stocks of ‘Variable growth funds’, the customers’ asset unfairly to save the large amount of corporation tax. “Allianz disturbed the customers’ profit selling the securities in separate accounts to save the corporation tax” and “Allianz sold the stocks of Variable growth fund in separate accounts on March 2007 in favor of the company's profits intended to reduce the corporation tax by getting the best out of TLCF (Tax Loss Carrying Forward) that expiration is coming” said PSPD.

It is said on December 2007 “According to big law firm, accounting company and insurance industry concerned, many insurance companies dealing with variable products from 2002 reduced taxes by replacing the appraisal profit and loss of stocks and bonds with company’s loss (tax administration) and the amount of reduced tax is estimated at 2000 billion won.” (Daily Taxation, 2007.12.12). According to the life insurance companies’ declared information in FSS of 2005,2006, amount of subtracting appraisal losses from the appraisal profits of stocks and bonds in ‘separate accounts’ in Kyobo Life was 118.055 billions won (variable product- 117.71 billions, retirement annuity- 345 millions won) the highest. Daehan Life after Kyobo Life was the second, 104.8 billions won, after that ING Life was 41.5 billions, Miraeasset Life was 39 billions won, PCA Life was 29.3 billions won, Allianz Life was 29 billions won, Shinhan Life was 20.6 billions won, Samsung Life was 19.1 billions won, Prudential Life was 11.8 billions won (Daily Taxation, 2007.12.12).

Allianz internal secret documents also contained about this. According to this documents, Allianz disposed of customers’ funds discretionarily to make the most use of 'Tax Loss Carrying Forward (TLCF)'. When calculating the standard of assessment for the corporation tax, deficit occurred in last 5 years is possible to be deducted from the yearly income. This is 'Tax Loss Carrying Forward (TLCF)'.
Allianz took over Jeil Life Insurance with considerable loss in 1999 so Allianz could use TLCF. Actually Allianz Life Korea had losses of 197.6 billions won in 2002 and of 36.1 billions in 2003. The better sales since 2004, Allianz had profits; 75.6 billions in 2005, 47.4 billions in 2006, 202.3 billions in 2007 but Allianz didn't pay the corporate tax by using TLCF for 4 years. Although deductible profits after 2004 exceeded the losses of 2002,2003, Allianz didn't pay the corporate tax continuously. A licensed tax accountant said “ It is estimated that Allianz had hundreds of billions of losses before 2002.”

The problem is a suspicion of that the company sold the stocks and bonds in separate accounts of variable funds discretionarily not to pay the corporate tax. PSPD criticized that Allianz forged company’s profits by putting the profits from separate accounts into general accounts. Allianz had the corporate tax reduction and exemption because of losses of 2002 & 2003, even in 2007 it does not need to pay taxes for 200 billions profits. “ To get the best out of this, Allianz Life made 200 billions profits artificially by selling stocks in separate accounts of variable growth funds on March 2007” said PSPD (KBS board, 2008.4.22).

Allianz Korea is on strike for 231 days.

2008-09-08T23:59:00.000-07:00

1,000 union members out of 1,300 are on strike against its management disruption, ignorance of Korean labor law Collective Agreement and against suspicion of illegal operating customer’s assets.

Union members are also on strike to make Allianz Korea protect their customer’s asset and be clean and ethical. (There are total 1,300 union members out of 1,700 employees in Allianz Korea)

German multinational group, Allianz Korea reduced its employees rather than creating employments and did tax evasion to maximize the profit of shareholders by disregarding for its social responsibilities and ethics. Is this understandable?

Allianz Korea prevented employees who demanded to respect the Collective Agreement legally from entering the company building by using gangsters and fired 100 employees.

Even more, Allianz Korea, financial service company, closed the company and established the steel structure around the Head Office building related to the company closure. If one company leaves their employees on the street ignoring their lawful demands for 5 months, is it a good and sound foreign company?

This kind of anti-national, anti-business company has to be punished by Korean Law, the management who committed illegal activities has to be punished and resigned.

Strike analysis of Allianz Korea(Similarities of Allianz and Lone Star)

2008-09-08T09:06:00.001-07:00

Allianz Life Korea violated the agreement of union and management, tried to dismantle the union, executed illegal dismissals, company’s closure and had suspicions about training center remodeling and tax evasion raised by citizen’s group.

Allianz Life Korea was revealed the company of losing basic morality, and to be unfavorable and liquidated. Internal financial market was disordered by the violent foreign companies since IMF, labor intensities of laborers were worse enough to make series of death from work so, the laborers became miserable. And Lone Star, the principle offender of illegal selling Korea Exchange Bank is still resorting to trickery desperately to get more money. So, Financial Industries Unions emphasizes that there is no difference between labor and management to scrap out the risky investment like Lone Star or anti-labor, anti-national enterprise like Allianz Life.

[table]Similarities of Allianz & Lone Star

Classification		Lone Star	Allianz Korea	Remark
Nationality		USA	Germany
Launching time to Korea		Only after IMF (1998)	Only after IMF (1999)
Character		Multinational Capital	Multinational Capital
Launching Field		Finance	Finance
Concern		Profits, Restructuring	Profits, ?
Ranking		4th of credit card industries	4th of life insurance industries
Profit source		Profit on sale (*)	?	(*) Estimated Profits of selling•Star Tower-280 billions won •KEB-4300 billions won
Payment of the corporate tax		0 won	0 won
Tax evasion	Method	Crafty sales of company	Crafty disposal of stocks
	Means	Outwitting the Tax Law	Outwitting the Tax Law
	Issues occurred by	Citizen Group	Citizen Group
	Issues occurred by	Spec Watch Korea	PSPD
Accused suspicion		Tax evasion	Corporate Tax evasion
		Smuggling out foreign currency	Violation of Insurance Law
		Purchasing foreign currency at low price	Corruption of training center remodeling
Strike	Strike or not	Strike	Strike
	Cause	Reconstructuring (succession of employment)	Performance related pay for reconstructuring
	Period	Long-term	Long-term
Upper group		KCTU	KCTU
Unfair labor practice of company		Criminal accusation for union executives	Criminal accusation for union executives
		Dismissal	Dismissal
		Hiring hoodlums	Hiring hoodlums
		Substitution of labor	Substitution of labor
Notice of dismissal		By SMS	By SMS
Closure	Ranking	The First in Financial industries	The Second in Financial industries
	Occupation of company	Occupation of the company (IT office)	No occupation
	Union office	No trespassing	No trespassing
	Dinning room	Prohibition	Prohibition
	Private land	?	Establishing steel posts
	Results	Down of public image	Collapse of sales, Down of public image
Final results	Agreement of union and management	35% layoff (voluntary resignation)	?

*Source: Allianz Korea Union Homepage.
http://www.allianzunion.or.kr/

Allian Korea, Truth and lies about Customers’ Money ‘badly management’

2008-09-08T09:04:00.000-07:00

[photo :Allianz remodeling of training center was clearly shoddy and fault construction, typical corruption of our society like irrational selecting construct company of management]

Failure of anti-corruption & open and aboveboard management – Personal profit being the first, public profit being the second

Allianz Life Korea carried out the remodeling of training center located in Bongmu-ri, Namsa-myun, Yongin during 12.1st 2006~ 3.31st 2007. Mostly over 100 millions construction case, company should select construction company to fit in the certain conditions of company’s guideline.

But the company hired the small Daeim Total Construction Inc. that did not match with the company’s guideline for the 5.4 billions big remodeling project by ‘ illegal agreement’ and violated the Regulation of monopoly and oligopoly and Fair Trade Law and aroused suspicion of making the small Daeim Total Construction Inc. receive an order of the remodeling project at 4.8 billions won. (Referring the written accusation submitted to Seoul South District Court Seoul, 2007.11) Allianz Life Korea making mutual agreement of the building company pumped up a bill of construction cost and facilities’ prices. It was also formal supervision of the construction. On this process, they got billions of personal profits and Allianz got losses the same.

The company’s losses came back to shareholders (investors), customers (consumers) and employees (laborers). Even more, it caused severe fault construction of training center and additional costs for defects after the remodeling.

Allianz Life Insurance provides a valuation and selecting guideline of Construction Company on purchasing RGP as follows.
4.1. Valuation of Construction Company goes for negotiation according to the 4.1.1 or 4.1.2 guidelines of price, quality, service, technique and financial soundness.

4.1.1. Purchasing amount under 50 million won needs more than 2 companies’ estimate, Purchasing amount over 50 million won needs more than 3 companies’ estimate. Purchasing amount over 100 million won needs to progress multi companies’ competition.

4.2. Selection of Construction Company is computed by the standards of article 4.2.1 or the clause 4.2.2.

4.2.1. Select the lowest price under the same conditions.
4.2.2.If it is difficult to select the lowest price, Select the company by establishing a proper standard considering of qualities, services, techniques, financial soundness, contribution to Allianz, estimate prices.

And, According to purchasing RGP of Allianz Life Insurace, there are factors to write out the candidates list like below.

7.1. After completing the clause 15.0 normally, buyer makes lists of estimates’ companies with the standards bellow using the industry years of purchasing items, purchasing association, internet, buyer’s self-acquired information and other department’s information.

7.1.1. The existing company with corresponding business results over 100 millions won of year and excellent past results or excellent financial soundness, or

7.1.2. A company within sales ranking 30th passing over 3 years in their business and sustaining sound financial status past 3 years, or

7.1.3. A company having records of delivering goods to foreign company over past 3 years and excellent financial soundness

7.1.4. A company recommended by buyers sustaining sound financial status past 3 years

According to above company’s guidelines, it has to be considered price, quality, service, techniques, financial soundness and contribution to the company to select the constructer. But only the lowest price was considered in above remodeling project not quality, service, techniques, financial soundness and contribution to the company were considered which were also important.

Daeim Total Construction Inc. making a successful bid at 4.8 billions won for 5.4 billions remodeling of training center had 2.4 billions won of total assets, 1.31 billions of capitals and 4.9 billions total sales of 3years between 2003 and 2005 far from the remodeling amount. And Daeim Total Construction Inc. with 15 employees was small size and low assets compared to the size of remodeling construction, and had no business records with Allianz, even no records of remodeling constructions so its quality or techniques of remodeling constructions were not proved at all. Though it was made up to have multi round competitions in selecting the constructor, all 6 companies of multi round competitions were the partly in Kyungki-Do, putting in a rigged bid was still possible.

Woojung C&C supervising of remodeling in Seocho-Gu was owned by university fellow pupil of YUN Jae-Hoon who was submitted to a disciplinary measure about remodeling of training center. So there was a suspicion that selecting supervisory company was also connected to the defendant YUN Jae-Hoon, poor supervision of remodeling caused many flaws. ‘Internal audit’ of above remodeling of training center found that 800 ~ 1000 millions won was paid for the exaggerated construction cost or facilities’ prices. Over appropriating and paying of construction cost was confirmed by union lawyer interviewing the audit department. The audit department had no authorization of tracing accounts so couldn’t find the all money flow and use, the audit department after internal audit through legal consults dismissed the director of general affairs P who was in charge of above remodeling and requested the dismissal of K manager of purchasing department and Y vice assistant chief who conducted and supervised the remodeling construction to the company

As Allianz Union checked the results of remodeling training center, they found many flaws concerned with remodeling construction. BA World Plus Inc., the managing facilities company of training center required to mend flaws of 85 items on August 31st 2007 and seeing the photos of remodeling flaws by BA World Plus Inc., the shoddy and fault construction of training center could not be overlooked.

Like above, Allianz remodeling of training center was clearly shoddy and fault construction, typical corruption of our society like irrational selecting construct company of management, exaggerated construction expenses, absurd supervision of construction caused it. Shortly, the management of company using their positions misappropriated the customers’ money and it was a case of ‘ Corporate Social irresponsibility’

About this problem, the company announced “ Information for customers about union’s claim regarding with training center remodeling (finished on March 2007)” on April 25th 2008. The company refuted, “union’s claim of reckless management of customers’ assets in training center remodeling was not true” [deny]. So, the construction expenses came from where? The company explained “ Allianz Life Korea increased the capital of 150 billions won for rising BIS, investing IT infra, education from German Headquarter on March 2006, 5.4 billions of that capital was used for remodeling of training center” [distort]. And the company explained that they conducted internal audit for the suspicions of construction risen by union on March 2007 and found problems like ‘over appropriating expenses’, ‘fault construction’ and ‘flaws after remodeling’ and submitted concerned persons to disciplinary action. [divide, dominate]. Specially, the company stated that they sued the construction company for 185 millions won of exaggerated construction expenses in damages. [deny, deceive]. And the company ended that they would be “ the company of thinking customers of our top priority”.

Interestingly, document conflicting with above announcement was found in ‘CEO message’ of Manuel Bauer the last president on March 2006. That massage stated that German Headquarter would invest 150 billions won to prepare for the strong ‘BIS standard’ of FSS scheduled in 2007. And the message stated, “with this money the company would invest in securities to increase bonds’ portfolio duration” and the company already got approval of Headquarter. And predicted that Doing it would increase the financial stability, BIS up to 200% and improve returns rate of asset management. The company’s choice was conceited “Allianz Life Korea should act as a good enterprise for people”. The message last emphasized, “ Union, employees and management have to work with cooperation”

A decisive question is rising here. In ‘CEO message’ of 2006 March, the additional invested money was “for investing in securities to increase bonds’ portfolio duration” but in ‘message for customers’ of 2008 April, the money was “for rising BIS, investing IT infra, education”. [deny, deceive] Investing in securities is clearly not same with investing in education. The company has a responsibility to explain the difference of both. And also has to explain the relevance of rising BIS and investing in education.

Meanwhile, the company explained that as a result of internal audit, they submitted concerned persons to disciplinary action for ‘over appropriating expenses’, ‘fault construction’ and ‘flaws after remodeling’, but did the management really not know about this before internal audit? (That was conducted hurriedly just because of union’s expression of suspicions) [delay, distort] This part makes us wonder that observing ‘ethical standard’ is only for employees and customers but the management is the exception. Pretending not to know, blaming others and making ‘victims’ without confessing truth [divide, dominate] seemed difficultly to be the act of ‘ self-responsibility’ or ‘civil enterprise’. Can “Union, employees and management work with cooperation” in these circumstances? To pursue ‘sustainable development’ without ‘ethical sustainability’ will cause not coexistence and coprosperity but collapse of itself.

These situations are not matching with not only the ethical management slogan of ‘ Allianz Insurance, leading sound and justifiable culture of corporate ethics’ but also the guidelines of ‘Fairness’ and ‘Observation of Law’. And these situations are completely not matching with the action principle to use ‘Allianz Whistle’ for “the illegal and unfair business”.

Reason making Allianz Korea Strike a long-term

2008-09-02T17:52:00.001-07:00

Starting from ‘ the conflict of performance related pay system’… Every critical moment, the company takes a strong line and the situation grows worse.

Strike of Life Insurance Union Allianz Life branch that was started last January with the conflict of performance related pay system became the 208th day on August 17.
It is an unexampled in the history of Allianz Life that had no strike for 47 years and the first strike continues over 200 days.

92 branch managers in strike was dismissed, JE Jong-Kyu the union president and a union member were arrested on suspicion of obstruction of business last May and released on bail recently.
Last month, hoodlums’ violence for the forced removal of strike tents made the relationship worse.
The company conducted ‘aggressive company closure’ only for the union members in the strike for 94 day.

△Dismissal• closure• arrest of union president •the forced removal of striking area•vicious circle of violence= Allianz joint struggle headquarters consisting of Democratic Labor Party, New Progressive Party, and Korean Federation of Clerical & Financial Labor Unions held the ‘Total resolution rally for the victory of strike’ last 14th at Allianz Yeouido head office. Negotiation party- Federation executive and other 9 negotiation members headed for the building lobby for negotiation after the rally.

But the company rejected to negotiate. The person concerned of company said, “ How can we talk with people who exercise the power in trust?” and “ They have to remove the illegal striking container first.” Negotiation party did sit-down demonstration at lobby for 30 minutes and had to fall back.

About the company’s claim of exercising power, most union members of the rally responded that the company with brazen cheek claimed it and it was absurd. According to the union, 30 union members were assaulted by hoodlums of the company in the violent conflict between union and the company last month 28th. Previously last month 26th dawn, 3 union members were assaulted and injured in the forced removal of striking tents. So the Civil Countermeasure Committee for settlement of Allianz Korea Strike accused JUNG Moon-Kuk Allianz President and people concerned with hoodlums of △ the law of act of violence and punishment △ robbery △violation of guard law to south district court on 29th.

Allianz Life conflict started from compulsory introduction of performance related pay and worrying about reconstruction became worse and worse with continuous violent collisions.

△The Department of Labor incited the long-term strike=After 3 months of strike, last April ‘mass dismissals’ of 92 branch managers was the first event to add fuel to the fire.
The company dismissed 99 branch managers last April 1st based on the authoritative interpretation of Seoul Labor Office “ Branch managers are the representatives of company interests, so they are excluded from union members in collective agreement.”

The Department of Labor provided the critical reason to fire branch managers.
Previously March 25th, LEE Young-Hee the minister of labor reported that Allianz branch managers were ‘not qualified to be union members’ Cabinet council.

But the Department of Labor declared the ‘no intervention’ through ‘ The stance of labor department about Allianz Life strike’ on April 23th. And the Department of Labor claimed “ the minister said that branch managers were not qualified to be union members to protect them from disadvantage.” In the event, ‘the concern’ of the Department of Labor caused massive dismissal of branch managers and the relationship between Allianz and union started to be worse.

Decision of the provisional disposition of the company by the south district court of Seoul on May says “although there is an article in the collective agreement to rule out the branch managers from union members, this article is just about the application scope of collective agreement” and “the branch managers joining the union cannot be rejected by this article” and it attracted public attention.

At that time Allianz union welcomed “ This decision confirmed that the administrative interpretation and guideline of Labor Department for performance related pay & branch mangers joining the union was wrong and prejudiced.” JEON Dae-Suk the head of Allianz Struggle Committee rebuked, “the careless judgment and intervention of Labor Department made the strike longer”

△Multinational Corporation Allianz, Where is ethical management? = Allianz is the biggest German nonlife Insurance company and started its business, Allianz Life Korea – the local corporate, in Korea taking over Jeil Life Insurance in 1999 July at the time of economic crisis. Allianz group attracted public attention that it was the M&A of financial corporate without investment of public finance. Completely different with German advanced relations between labor and capital, Allianz in Korea showed its relations.

According to UNI Korea Allianz held the big forum for ethical management and corporate social responsibility recently. Ethical management in Germany and Korea is going to the exact opposite.

LEE Byung-Hoon the professor of ChungAng University said,” The union is struggling but still the laborer power is not strong enough like Germany or Europe and the system is insufficient, so the things observed in Germany are not observed in Korea.” Professor LEE also decried “ Allianz emphasizes the social responsibility and it must not be stopped only in PR.”

Noblesse oblige(Allianz Korea is on strike for 221 days.)

2008-08-31T17:52:00.000-07:00

After firing 5 representatives of branch managers early of March, Allianz Life Korea held the personnel committee at the end of March and dismissed 100 branch managers only because they joined the strike claiming that they were not qualified for union members [deny] They were 40% of total branch managers (285).

The company held a management committee on April 1st and decided the dismissal of 99 branch managers except 7 returned managers since the personnel committee [divide and rule]. The resistance of Union became stronger, 66 dismissed branch managers executed haircutting on April 10th, 21 managers started on fasting.

Union requested continuously to have negotiation of faith and sincerity but the requests were rejected every time [delay]. The strike was going on.

One female union member screamed that the strike from company’s fault caused family breaking : “I am a employee of Allianz Life Korea. I am a mother joining the strike for 91 days. I have 7- year-old daughter and 10- month son. My daughter entered a primary school in this year. When I visited daughter’s school to meet her teacher with absence in strike, I heard the surprised word from the teacher. The teacher of my daughter thought mom was going to divorce.Every morning 70-year-old grandmother brings her to school with my son on her back and the teacher in charge saw it. The teacher asked my daughter that mom was in home, my daughter answered she was in Kangwon-Do and barely came home. … At that moment, I was chocked with the unknown sorrow and helpless tears. Whenever I thought about it, it hurts me and make me cry.”

The person concerned the Allianz Korea said, “ the Union interferes the branch managers returning to office” [distort]. And claimed that the struggle way of union has made the problem of Allianz difficult. (By KANG Phil-Sung 2008.4.29, CFE guest reporter) He said,” After starting the persuasion for branch managers, they started to come back. And union members took them away in local area. The company persuaded 167 branch managers to return to work, 20 managers returned on March 27th. And suddenly, the union went to Mokpo with remained managers. Executives, the vice president and the sales directors visited Mokpo to persuade them, they left to Jeju-Do. Union and branch managers kept avoiding. Even families visited them but they avoided meeting. [divide and rule]

He claimed “ every time conflict happened, the union president did not come to the front and entrusted the matter to Korean Federation of Clerical & Financial Labor Union.” And “ The union draws upper union to our matters” doubted he that upper union made the matters bigger [distort]. He also said,” Seeing the former example of Mirae Asset Life, if the union occupied the head office building, it would go into long-term strike so, the company was compelled to hire the guards to protect the building [deceive, delay].

On April 24th 2008 the secretary-general of EUCCK, Jean-Jacques GRAUHAR sent the letter to the president LEE Myung-Bak, the chairman of the National Competitiveness Council SA Gong-Il, the Parliamentary Chief Secretary PARK Jae-Wan, the Chief Secretary of social policies PARK Mi-Suk and claimed that the strike of Allianz Korea was illegal and asked Government’s aggressive intervention emphasizing on company’s damage (Financial damage and decrease of public image) and expressing regret over Government’s passive action to branch managers illegal strike.[dominate]

Union and the company had the closed negotiation about performance related pay system on April 29th but only confirmed the big different stance of both and finished the meeting without later negotiation plan. [delay] Regarding performance related pay system, the company said,” if the union suggests constructive opinions about the system, the company is ready to accept it after serious discussing” [dominate], the union claimed “ the withdrawal of compulsory implementation of the system in advance”. They cannot find the compromised clues.

600 union members had ‘the proclamation of all-out struggle on May’ with Korean Federation of Clerical & Financial Labor Unions on April 30th at Yeoui-do Hea office building and assembled against the dismissal of branch managers and compulsory implementation of performance related pay. The union sent the expedition to the general meeting of shareholders in German Headquarter scheduled on May 21st.

Union president JE Jong-Kyu and the union member KIM Jae-Suk were arrested on a charge of illegal strike & obstruction of business on May 8th. [dominate]. After that, the company had a management committee about 99 dismissed branch managers’ request of reexamination and relieved 12 branch managers returning to work additionally with mild discipline and confirmed the dismissal of 87 branch managers. Dismissed branch managers became 92. 12 contract employees joining the strike were dismissed too. One union member of strike described his heart about this.

“We are powerless, poor laborers.
But we are not going to blind with dirty money and system,
We never surrender to flagrant foreign capital.
And we will continue our fair struggle until the end. ”

What is the reason for the strike occurred Allianz Korea?

2008-08-27T22:13:00.000-07:00

Failure of building trust between Labor and Management – Neglecting inside customers, Deficiency of advanced management

The conflict of Allianz Life Korea came outside with ‘the implementation of performance related pay’ on January 21st 2008. Labor & management agreed about the introduction of performance related pay in 2005,2006 but the final model of pay system was not agreed. Negotiation of wages was linked with negotiation of performance related pay; the company raised 3.5% of pay additionally in 2006 in terms of giving up the allowance of monthly leave eternally. Allianz Korea had the freezing of wages in 2004, raised 14% in 2005 and 8% in 2006 (including 3.5% compensation for the waiver of allowance; 11.5% in 2006). Average raise of 3 years (2004~2006) is 7.3% of basic pay. But the company included 3.5% compensation for the waiver of allowance and made average rate of 2 years (13% per year; 2005~2006) and claimed that it raised the basic pay very much for the implementation of performance related pay.

So, Labor Union indicated the problems of company’s suggesting performance pay system and tried to get to the agreement by negotiation. But the company compulsorily applied 7.5% raise for the wages of 2007. Without agreement of Labor Union, the company insisted to pay the salary discriminately dividing into 5 grades of employees’ performance. Labor Union could not agree with this idea. Despite a lot of meetings for the renewal, union and company had never made agreement. So the union applied for the mediation in a labor trouble of the National Labor Relations Commission on April 23rd 2007, The National Labor Relations Commission decided to end the mediation without suggesting any proposal because of big difference between labor and company on May 14th.After the end of mediation, over 20 times negotiations were proceeded during May 15th ~ November 14th 2007. But the company insisted consistently that there could be negotiation only after setting the introduction of performance-related pay as a premise. So the union put to the vote for strike for two days (November 20~21 2007) about “the renewal of collective agreement, productivity bonus and regular promotion”. 1,008 union members out of 1,086 on the resister voted and 95.5% of the voters were agreed for strike. Union reported the strike to the south branch office of Seoul Regional Ministry of Labor. After that, union started the struggle of a work-to-rule and picketing.

On the process of this, the company concluded that the union abused the right of Agreement [distort] and the company announced the CEO message on January 17th and implemented compulsorily the performance-related pay without agreement of union on January 21st 2008. The performance related pay of Allianz Korea divides employees’ performance into 5 grades and pay the salary differently for each grade. But the labor union went into the strike pitching tents at headquarter, underground parking lot against the compulsory implementation of performance related pay: ’discriminated pay of basic salary & performance bonus’. The strike came into the spotlight because it was the first large-scale strike since the president LEE Myung-Bak government.

The company claimed, “the withdrawing of performance-related pay was the essential part for control of the company and could not be the object of strike” [deny, deceive]. The company insisted that “the conflict for power could not be settled by strike” [dominate, distort] and also claimed that “the mediation of the National Labor Relations Commission and the vote of union members was not for the withdrawing of performance-related pay that was pointed as the main reason of the strike by union so the strike was out of order” [deny, distort].

Meanwhile, the south branch office of Seoul Regional Ministry of Labor on March 14th sent an inappropriate official document to company and union saying, “Making the branch managers join the union and strike is a violation of collective agreement, so it cannot be protected by law”. And the company abused this document. The Ministry of Labor also made the authoritative interpretation that “Branch managers are users or representatives of company benefit in the Labor Union Act, so branch managers are not qualified to joining the union and cannot attend the strike”. But the Union cannot accept the interpretation because branch managers do not have the right to implement personnel management for insurance agents and they are not the users. However, Lee Yong-Hee, the minister of Labor reported to the President “Branch managers in Allianz Life Korea are not qualified to join the labor union”. Inappropriate judgment and unfair biased administrative guidance of Ministry of Labor caused the mass dismissal of Allianz Korea. Finally Allianz Korea conducted the unexampled “dismissal of 92 branch managers” [dominate]. End of May, the district court rejected most of the company’s applying for provisional disposition [dominate] and said “although there is an article in the collective agreement to rule out the branch managers from union members, this article is just about the application scope of collective agreement and the branch managers joining the union cannot be rejected by this article”. It needs more time to wait for the judgment about this issue.

Allianz korea, Suspicion of selling stocks-Customer’s asset ‘ Variable growth fund’ for the corporation tax reduction

2008-08-24T19:35:00.000-07:00

Insurance Business Law provides that insurance company keeps an account of variable funds separately from general accounts. The VUL policy holders will get the profit depending on the result of Insurance company's asset management, so the Insurance company have to make the separate accounts for the VUL and manage it with ‘due diligence’. But “Allianz sold the stocks of VUL growth fund in separate accounts not for the customers profit but for the company's tax profit on March 2007 and caused the customers loss of opportunity profit” said PSPD. “ Selling the customers’ asset for the company’s profits and damaging the expected profits of customers are the violation of the due diligence of Insurance Business Law.” (“Moral hazard”)

Actually it was suspicious of Allianz from July 2006. In company’s internal meeting minute, ‘reducing the corporate tax plan’ has been progressed carefully not by staff but by the management board. The company’s ‘project of tax reduction’ is summarized as follows. (Sunday Current Affairs, 2008.4.22)

On July 2006, Mr. A, the Financial Director of Allianz, ordered to estimate & review the several scenarios to minimize the appraisal profit and loss. “Discussion about the uncollected income and appraisal profit & loss in VUL is important. Prepare two scenarios; general case and the case of minimizing the VUL valued loss.”

On Sep. 6th 2006, Allianz had a meeting about tax loss carrying forward utilization plan. At that meeting, ”If Allianz doesn't have a special plan to use TLCF, the company will get a big tax loss because the deficit of expected profit on FY2006 & FY2007 are expired. It is needed to discuss about the tax profit by adjusting the investment portfolio before the TLCF expiration”, and suggested the plan regarded to stock portfolio of separate account, “change the items to covert appraisal profit to disposal profit, and reduce the appraisal profit below 5 billion KRW for adjust tax code till Mar, 2007.”

After the meeting MR. A sent e-mail to major members: “CEO, CFO, CIO approved our strategic tax plan (plan to use TLCF). It's still confidential and do not deliver it without authorization. Specially be careful to adjust the appraisal profit in separate account for preventing the legal, financial problems.”
Through all this progress, Allianz Life made the actual plan in the concrete on October 2006. The title was ‘plan for the usage of TLCF’. Reviewed reports by Allianz Global Investment Asset Management were attached to this. According to the plan, the company selected the 17 objective items enough to make more than a billion profits and would ‘deal them in normal way’ till February and then ‘deal them for usage of TLCF’ from March 2007. And in the report on Jan 8th 2007, there were 3 scenarios for the actual activity plan. Besides, Allianz discussed the plan ‘to achieve the -10 billion KRW as uncollected income’ on Mar 9th, 2007. Related to this, they made actual strategy like “plan to make the profit from some uncollected income or stock sales in the market circumstances and fluctuation from Mar 12th to Mar 23rd, and plan to achieve the goal by making the profit from uncollected income stocks by selling the stocks actively according to the KOSPI scenario analysis and operation plan on last week of March."

According to the plan, Allianz sold the some stocks of variable funds watching the market circumstances and fluctuation from Mar 12th to Mar 23rd. Sticking to the plan of ‘making 25.5 billions disposal profits by selling 179.5 billions stocks’ on January 2007 report, Allianz’s disposal profits of selling stocks were close to 25.5 billions KRW.
On the end of March 2007, available carry-over deficit of Allianz was 236,991,551,189 KRW. And the standard of assessment was 202,360,651,418 KRW after tax adjustment; finally Allianz did not pay the corporate tax of 2007 at all by getting the best out of TLCF that was expired on March 2007 (Yonhap News, 2008.4.16).
“Allianz did not pay the corporate tax at all by getting the best out of TLCF which was expired on Mar, 2007. (Tax exemption for the 197.6 billions won losses in 2002)” said PSPD and “ Returns of variable funds of other insurance companies were the upward tendency at that time because of the rise of stock prices but Allianz variable funds were stagnated. So many policyholders of Allianz variable funds made civil petitions for the low returns.”

According to PSPD, Allianz Life Korea sold the stocks of Variable Universal Growth Fund (VUL) intensively through the interrelated enterprise Global Investment Asset when the KOSPI started to rise at 1400 on March 2007. Like the feature of variable funds to give the returns of funds to policyholders depending on funds management, Allianz does not need to sell the stocks at the KOSPI rising sharply (Maeil Labor News, 2008.04.18). Actually KOSPI showed the sharp rising over 2000 on July 2007.

It was reported on the internal documents on April 2007 that Returns of other insurance companies were the upward tendency but ‘Allianz VUL growth fund’ were stagnated. (Ohmy News, 2008.4.16) More concretely, the returns of Allianz VUL growth funds started to be fallen than the previous at March 2007. Allianz VUL was the 8th returns rate out of 390 VUL funds on January but was fallen to the 13th at the end of April. Compared to funds of major 6 companies, Allianz VUL had the second returns rate, but compared to the first fund of Metlife gaps of rate became bigger and bigger. Returns rate was 5.99% lower than Metlife on January, was 9.16% lower on April. About the reason of rate fallen, Allianz Life answered, “There were problems not in effect of asset distribution but in effect of selecting items.” This was written on the discussion of using Variable funds on April 30th 2007. (Pressian 2008.4.16)

Failure of customer focused management in Allianz Korea

2008-08-21T19:25:00.001-07:00

Failure of customer focused management – privately-owned profits, socialized expenses

There was a suspicion of Allianz Life Insurance “using illegally” the customers hundreds of millions by People’s Solidarity for Participatory Democracy in the mid of April 2008. Key issue is that the company sold the stocks of ‘Variable growth funds’, the customers’ asset unfairly to save the large amount of corporation tax. “Allianz disturbed the customers’ profit selling the securities in separate accounts to save the corporation tax” and “Allianz sold the stocks of Variable growth fund in separate accounts on March 2007 in favor of the company's profits intended to reduce the corporation tax by getting the best out of TLCF (Tax Loss Carrying Forward) that expiration is coming” said PSPD.

It is said on December 2007 “According to big law firm, accounting company and insurance industry concerned, many insurance companies dealing with variable products from 2002 reduced taxes by replacing the appraisal profit and loss of stocks and bonds with company’s loss (tax administration) and the amount of reduced tax is estimated at 2000 billion won.” (Daily Taxation, 2007.12.12). According to the life insurance companies’ declared information in FSS of 2005,2006, amount of subtracting appraisal losses from the appraisal profits of stocks and bonds in ‘separate accounts’ in Kyobo Life was 118.055 billions won (variable product- 117.71 billions, retirement annuity- 345 millions won) the highest. Daehan Life after Kyobo Life was the second, 104.8 billions won, after that ING Life was 41.5 billions, Miraeasset Life was 39 billions won, PCA Life was 29.3 billions won, Allianz Life was 29 billions won, Shinhan Life was 20.6 billions won, Samsung Life was 19.1 billions won, Prudential Life was 11.8 billions won (Daily Taxation, 2007.12.12).

Allianz internal secret documents also contained about this. According to this documents, Allianz disposed of customers’ funds discretionarily to make the most use of 'Tax Loss Carrying Forward (TLCF)'. When calculating the standard of assessment for the corporation tax, deficit occurred in last 5 years is possible to be deducted from the yearly income. This is 'Tax Loss Carrying Forward (TLCF)'.
Allianz took over Jeil Life Insurance with considerable loss in 1999 so Allianz could use TLCF. Actually Allianz Life Korea had losses of 197.6 billions won in 2002 and of 36.1 billions in 2003. The better sales since 2004, Allianz had profits; 75.6 billions in 2005, 47.4 billions in 2006, 202.3 billions in 2007 but Allianz didn't pay the corporate tax by using TLCF for 4 years. Although deductible profits after 2004 exceeded the losses of 2002,2003, Allianz didn't pay the corporate tax continuously. A licensed tax accountant said “ It is estimated that Allianz had hundreds of billions of losses before 2002.”

The problem is a suspicion of that the company sold the stocks and bonds in separate accounts of variable funds discretionarily not to pay the corporate tax. PSPD criticized that Allianz forged company’s profits by putting the profits from separate accounts into general accounts. Allianz had the corporate tax reduction and exemption because of losses of 2002 & 2003, even in 2007 it does not need to pay taxes for 200 billions profits. “ To get the best out of this, Allianz Life made 200 billions profits artificially by selling stocks in separate accounts of variable growth funds on March 2007” said PSPD (KBS board, 2008.4.22). And PSPD pointed that if it is true to put the profits from separate accounts into general accounts for the reduction of corporate tax, it could be the tax evasion. Insurance company has to separate the accounts of variable insurances and not to reflect the investment gains of it on financial statements. Insurance companies did not reflect the investment gains of ‘separate accounts’ of variable funds on financial statements at ordinary times but only at tax times, they adjusted the ‘appraisal profits of stocks & bonds’ in separate accounts and reduced the corporate tax. This tax administration could be considered that insurance companies were using variable products for tax evasion. So, the National Tax Service made a additional charges of insurance companies’ tax administration in variable products on February 2008 (Pressian, 2008.4.16).

Reason making Allianz Life Korea Strike a long-term

2008-08-20T01:30:00.000-07:00

Starting from ‘ the conflict of performance related pay system’… Every critical moment, the company takes a strong line and the situation grows worse.

Strike of Life Insurance Union Allianz Life branch that was started last January with the conflict of performance related pay system became the 208th day on August 17. It is an unexampled in the history of Allianz Life Korea that had no strike for 47 years and the first strike continues over 200 days.

92 branch managers in strike was dismissed, JE Jong-Kyu the union president and a union member were arrested on suspicion of obstruction of business last May and released on bail recently.
Last month, hoodlums’ violence for the forced removal of strike tents made the relationship worse.
The company conducted ‘aggressive company closure’ only for the union members in the strike for 94 day.

△Dismissal• closure• arrest of union president •the forced removal of striking area•vicious circle of violence= Allianz joint struggle headquarters consisting of Democratic Labor Party, New Progressive Party, and Korean Federation of Clerical & Financial Labor Unions held the ‘Total resolution rally for the victory of strike’ last 14th at Allianz Yeouido head office. Negotiation party- Federation executive and other 9 negotiation members headed for the building lobby for negotiation after the rally.

But the company rejected to negotiate. The person concerned of company said, “ How can we talk with people who exercise the power in trust?” and “ They have to remove the illegal striking container first.” Negotiation party did sit-down demonstration at lobby for 30 minutes and had to fall back.

About the company’s claim of exercising power, most union members of the rally responded that the company with brazen cheek claimed it and it was absurd. According to the union, 30 union members were assaulted by hoodlums of the company in the violent conflict between union and the company last month 28th. Previously last month 26th dawn, 3 union members were assaulted and injured in the forced removal of striking tents. So the Civil Countermeasure Committee for settlement of Allianz Korea Strike accused JUNG Moon-Kuk Allianz President and people concerned with hoodlums of △ the law of act of violence and punishment △ robbery △violation of guard law to south district court on 29th.

Allianz Life conflict started from compulsory introduction of performance related pay and worrying about reconstruction became worse and worse with continuous violent collisions.

△The Department of Labor incited the long-term strike=After 3 months of strike, last April ‘mass dismissals’ of 92 branch managers was the first event to add fuel to the fire.
The company dismissed 99 branch managers last April 1st based on the authoritative interpretation of Seoul Labor Office “ Branch managers are the representatives of company interests, so they are excluded from union members in collective agreement.”

The Department of Labor provided the critical reason to fire branch managers.
Previously March 25th, LEE Young-Hee the minister of labor reported that Allianz branch managers were ‘not qualified to be union members’ Cabinet council.

But the Department of Labor declared the ‘no intervention’ through ‘ The stance of labor department about Allianz Life strike’ on April 23th. And the Department of Labor claimed “ the minister said that branch managers were not qualified to be union members to protect them from disadvantage.” In the event, ‘the concern’ of the Department of Labor caused massive dismissal of branch managers and the relationship between Allianz and union started to be worse.

Decision of the provisional disposition of the company by the south district court of Seoul on May says “although there is an article in the collective agreement to rule out the branch managers from union members, this article is just about the application scope of collective agreement” and “the branch managers joining the union cannot be rejected by this article” and it attracted public attention.

At that time Allianz union welcomed “ This decision confirmed that the administrative interpretation and guideline of Labor Department for performance related pay & branch mangers joining the union was wrong and prejudiced.” JEON Dae-Suk the head of Allianz Struggle Committee rebuked, “the careless judgment and intervention of Labor Department made the strike longer”

△Multinational Corporation Allianz, Where is ethical management? = Allianz is the biggest German nonlife Insurance company and started its business, Allianz Life Korea – the local corporate, in Korea taking over Jeil Life Insurance in 1999 July at the time of economic crisis. Allianz group attracted public attention that it was the M&A of financial corporate without investment of public finance. Completely different with German advanced relations between labor and capital, Allianz in Korea showed its relations.

According to UNI Korea Allianz held the big forum for ethical management and corporate social responsibility recently. Ethical management in Germany and Korea is going to the exact opposite.

LEE Byung-Hoon the professor of ChungAng University said,” The union is struggling but still the laborer power is not strong enough like Germany or Europe and the system is insufficient, so the things observed in Germany are not observed in Korea.” Professor LEE also decried “ Allianz emphasizes the social responsibility and it must not be stopped only in PR.”

News Written: 2008-08-17 06:00:54
Final edit: 2008-08-18 08:57:14
ⓒMail Labor news

source: http://www.vop.co.kr/A00000219076.html

Declaim against immoral executives of Allianz Korea

2008-08-17T17:55:00.001-07:00

Allianz Korea is on strike for 205 days.

1,000 union members out of 1,300 are on strike against its management disruption, ignorance of Korean labor law Collective Agreement and against suspicion of illegal operating customer’s assets.

Union members are also on strike to make Allianz Korea protect their customer’s asset and be clean and ethical. (There are total 1,300 union members out of 1,700 employees in Allianz Korea)

German multinational group, Allianz Korea reduced its employees rather than creating employments and did tax evasion to maximize the profit of shareholders by disregarding for its social responsibilities and ethics. Is this understandable?

Allianz Korea prevented employees who demanded to respect the Collective Agreement legally from entering the company building by using gangsters and fired 100 employees.

Even more, Allianz Korea, financial service company, closed the company and established the steel structure around the Head Office building related to the company closure. If one company leaves their employees on the street ignoring their lawful demands for 5 months, is it a good and sound foreign company?

This kind of anti-national, anti-business company has to be punished by Korean Law, the management who committed illegal activities has to be punished and resigned.

The management has to make wise decision for the settlement of strike not to damage their customers as soon as possible.

Allianz Life Blog Touches Sensitive Nerve

2008-08-12T19:20:00.002-07:00

source: http://bobmaconbusiness.com/?p=74#more-74

August 11th, 2008 · 3 Comments · Blog, Business Ethics, Business Management, Financial Services, Insurance Marketing

Amazing! Only in America! What a great country!

Judging by the hornet’s nest of comments created by my recent critique of Allianz Life it is obvious that the issues discussed did touch a nerve rubbed raw by the company’s recent activities and results.

A couple of obvious conclusions can be drawn from such an intense reaction. The issues raised must have some validity or they would not have triggered such an outpouring of comments. The reactions- pro and con- show that there are still a large number of people who are concerned and passionate about the future of the company. That is a good thing.

At the time I am writing this entry more than 40 comments have been posted. That is about half the number that has jammed my personal e-mail box. Sadly, for fear of corporate retribution, many of those writers felt too intimidated to “go public” with their views.

Frankly, I was not surprised by the maelstrom that followed the blog. (In case you missed it, this is the blog that created all the controversy.) It has been over six years since I retired as CEO of the company, but I have remained in close touch with many of the people and the activities of the company. I knew the blog would raise a firestorm, but so be it. The time is right and the issues need to be discussed.

With my background and connection to the company, no one can claim to be more interested in the success of Allianz Life than I. I may have retired as CEO, but neither my feelings for the company, employees or the field went away. An examination of my activity since retirement will show a history of doing all I could to support the company. However, in light of all that has happened at Allianz Life during the past few years I could no longer remain quiet.

I am sure the bureaucratic minions now in charge of the company will not agree, but my objective in going public with my concerns is to help Allianz Life. It was Henry James who said, “The critic is a valuable instrument, a torch bearing outrider.” I offered my views and will continue to do so because the biggest business challenges for Allianz leadership is to understand why business has fallen so precipitously and why so many employees - past and present - are so discontented. And then they must be challenged to do something about it.

The worst thing that can happen is for Allianz management to dismiss the issues we’ve raised as just so much disgruntled disparagement from past and present employees. That’s the bureaucratic way. Bureaucrats discount and dismiss dissent as they plow forward with business as usual - till it is too late.

I would be even more disappointed with myself if I continued to stand by quietly watching the continued decline and destruction of the company. Not to mention seeing more talented good people being “escorted out” or discouraged and frustrated to the point of leaving.

Et tu, Brute?

Believe it or not, I appreciate the comments from those who attempted to “bury” Mac even more than those who sought to praise him. Compliments make us feel good, but constructive criticism helps us to learn and grow.

It is important for the critics to understand that my comments are not Johnny-come-lately. Since the day of my retirement, both behind the scenes and publicly, I have worked to resist and fight the destructive changes that have led to the decline of Allianz Life. One might go back to read my presentation at the 2005 FMO meeting titled “The Agony of Success” (converted to Chapter 19 of “Cheat To Win”). It explains how even extremely successful companies sometimes rest on their laurels, whereupon they stagnate and decline as brighter, nimbler entrepreneurial companies seize the competitive opportunity.

To be honest I am itching to respond to the negative comments of some, but that would shift the focus of the discussion away from the real issues here. The debate and discussion should focus on what can, should and will be done to stop the spiraling decline of Allianz Life as a successful company and a great place to work. For this forum I am satisfied to stand on my record of 20 years building companies, cultures and relationships.

The purpose of my blog was to ask the question and stimulate the debate as to why a great company and a wonderful place to work is being destroyed. My personal belief is that the company’s culture and future is being destroyed by a self-serving, insecure, incompetent bureaucratic management group of Allianz Life and AZOA. I may be wrong, but that is not the point. The point is that these issues do need to be brought to the surface and addressed before it is too late.

Can’t Change the Facts

We can argue about cause and effect, but the fact of the matter is that for the past several years the performance of Allianz Life has been in steady decline. In addition, the culture and work environment of the company has turned from positive to negative. There are also no indications that this poor performance and negative work environment will turn around anytime soon. Or even that there is a plan to do so. (Of course, to do that you would first have to admit that there is a problem and bureaucrats are loathe to do so.)

From my perspective the core, overriding and defining reason Allianz Life is declining is due to a change from a vibrant entrepreneurial culture to one infested and dominated by bureaucrats and bureaucracy. In order to regain its balance, success and greatness Allianz Life must return to a culture based on entrepreneurial philosophy.

The leaders must understand that for successful companies, it is not the company that defines the culture, it is the culture that defines the company.

From some of the comments to the blog it is obvious that many do not understand the real tenants of an entrepreneurial philosophy. Mention the word entrepreneur and many conjure up the image of a wild, swashbuckling dreamer interested only in money. Nothing could be further from the truth.

A true entrepreneur is not determined by the measure of his or her results, but by how those results were attained. Being an entrepreneur is more about attitude than aptitude.

Entrepreneurialism is a way of living life,
not a way of managing life.

The real entrepreneur or entrepreneurial culture has a certain spirit, élan and approach to issues that is just different. And that is the key. In a bureaucratic system that demands sameness, the entrepreneur is willing to be creatively different. Bureaucrats fail to understand that only by being different can things be made better. That is the philosophy at the heart of an entrepreneur and an entrepreneurial culture.

By my definition an entrepreneur is an individual with the experience to recognize an opportunity, the inherent instinct to visualize its fulfillment, and the courage to reach for it. An entrepreneur is by nature a leader who has the talent to clearly, simply, consistently and relentlessly communicate the vision to employees and to others; one who can motivate others to be successful because they believe it is in their own best interest to do so.

Using my definition then an entrepreneurial culture consists of a group of individuals who have suppressed individual interests in an effort to achieve group success because group success will advance both their individual talents and their ultimate success and rewards. This is difficult to achieve when the leaders demonstrate interest only in their success and not others.

Honestly, I ask you - How many of the leaders at Allianz Life and AZOA would qualify as believing, thinking and acting with an entrepreneurial spirit? Just how entrepreneurial is the Allianz Life culture of today?

It is important to understand that bureaucratic management and cultures destroy value while entrepreneurial leaders and cultures create value.

No company starts as a bureaucratic company but it begins to fail as soon as bureaucratic leaders and bureaucracy begin to infest and gum-up company actions and thinking.

Employees wondering if they work in an entrepreneurial or bureaucratic culture need only ask:

How well does the company communicate its mission to employees? Do I even know where this business is heading?
Is change resisted, tolerated or welcomed?
Is experimentation encouraged, important and constant?
Is risk regaled or reviled?
Are the leaders satisfied with what worked yesterday, rather than trying to find new things that will work tomorrow?
Do the leaders find it easier to hire more people from the outside than to nurture and develop them from the inside?
Do the leaders define success by what they have done rather than what could be do?
Do the leaders feel that getting better is not as important as keeping what they have?
Is process and procedure viewed as more important than performance and progress?
Is extraordinary performance recognized and rewarded or is cronyism the way to the top?
Do the leaders share in the financial pain of any downturn or do they insulate themselves at the expense of others?

You should ask and answer these questions about Allianz Life and then draw your own conclusion. When doing so, you should also ask the following specific questions about Allianz Life and its leadership.

How many years has it been since Allianz Life introduced a truly creative and innovative product? (I am not talking about bells, whistles and gimmicks added to “accessorize” existing products.
How many new markets, i.e. retirement, has Allianz entered?
What new sources of production have been added in the past few years?
Does Allianz Life now lead or follow?
Do the actions of management seem reactive to problems or are they proactive in searching out new opportunities?
Do the actions of management in an effort to increase sales seem based on short-term fixes and stimulants rather than long-term plans?
Why does management spend more time planning additional outsourcing and layoffs than it does helping people become more successful and productive?
Does management make you feel personally valuable and important?
Do you feel that you are encouraged to “make a difference,” and if you do, will it be recognized?
Point Made

I could go on, but I think the point is made. My belief is that Allianz Life is declining because weak, insecure, self-serving bureaucratic managers at Allianz Life and AZOA have failed the culture of success at the company and that they lack the vision to build parallel interests and reminisce about the future.

Let the debate begin. Not a debate about how we got to where we are today but how we can get to where we need to be tomorrow.

(While I have you, here is a commercial message. Just to prove to the critics I am only interested in money. If you are serious about this discussion and would like more depth, I encourage you buy a copy of my newest book “Beat The System - Building an Entrepreneurial Culture in a Bureaucratic World.” You can do so here on the Web site or by going to Amazon.com)

Union members of Allianz Korea got serious injuries by crazy hoodlums who were hired by Allianz Life Korea

2008-08-12T19:20:00.001-07:00

http://www.flickr.com/photos/odius/2732048618/
Hoodlums of Allianz Life Korea are assaulting union members and stripping them naked trying to establish strike tents in front of headquarter in Yeouido of Seoul at 28th afternoon. One union member is covering his face because of assault.
Photo by LEE Ki-Tae/Labor and World

Allianz Korea is on strike for 195 days.
1,000 union members out of 1,300 are on strike against its management disruption, ignorance of Korean labor law & Collective Agreement and against suspicion of illegal operating customer's assets. Union members are also on strike to make Allianz Korea protect their customer's asset and be clean and ethical. (There are total 1,300 union members out of 1,700 employees in Allianz Korea). but Allianz korea hire a hoodlums to break a strike.

Union members of Allianz Life got serious injuries by hoodlums who were hired by Allianz Life Korea and were transferred to hospital.

The union of Allianz Life established the containers in front of the headquarter to secure the strike area at 4 AM of 28th after hoodlums destroyed the strike tents and took struggle goods last 26th.And in the afternoon hoodlums hired by Allianz Life Korea offered violence to union members who tried to establish tents.

One male union member bled badly at his left eye because of hoodlums’ ignorant and uncouth violence. Strongly struggled 4 female union members also got injuries. And many union members got big & small wounds being pushed and tumbled by hoodlums. Hoodlums pulled the hair or gripped the arms or legs of union members and threw them regardless of sex. Injured 5 union members were transferred to St Mary’s Hospital in Yeouido and got first aid treatment.

Union members tries repeatedly to establish tents in front of headquarter all throuth this afternoon and are standing opposite each other with hoodlums. 3:50 pm now, 200 union members are going on a sit-down strike in front of Allianz Life Headquarter in Yeouido, 100 hoodlums are in the building.

Allanz Korea is on strike for 202 days.Is the branch managers joining the strike illegal?

2008-08-11T15:37:00.001-07:00

source : “Multinational Corporate Social Responsibility”(Especially about Allianz Life Korea case)by KANG Su-Dol (Professor of Korea University)

After firing 5 representatives of branch managers early of March, Allianz Life Korea held the personnel committee at the end of March and dismissed 100 branch managers only because they joined the strike claiming that they were not qualified for union members [deny] They were 40% of total branch managers (285). The company held a management committee on April 1st and decided the dismissal of 99 branch managers except 7 returned managers since the personnel committee [divide and rule]. The resistance of Union became stronger, 66 dismissed branch managers executed haircutting on April 10th, 21 managers started on fasting. Union requested continuously to have negotiation of faith and sincerity but the requests were rejected every time [delay]. The strike was going on.

One female union member screamed that the strike from company’s fault caused family breaking : “I am a employee of Allianz Life Korea. I am a mother joining the strike for 91 days. I have 7- year-old daughter and 10- month son. My daughter entered a primary school in this year. When I visited daughter’s school to meet her teacher with absence in strike, I heard the surprised word from the teacher. The teacher of my daughter thought mom was going to divorce. Every morning 70-year-old grandmother brings her to school with my son on her back and the teacher in charge saw it. The teacher asked my daughter that mom was in home, my daughter answered she was in Kangwon-Do and barely came home. … At that moment, I was chocked with the unknown sorrow and helpless tears. Whenever I thought about it, it hurts me and make me cry.”

The person concerned the Allianz Life said, “ the Union interferes the branch managers returning to office” [distort]. And claimed that the struggle way of union has made the problem of Allianz difficult. (By KANG Phil-Sung 2008.4.29, CFE guest reporter) He said,” After starting the persuasion for branch managers, they started to come back. And union members took them away in local area. The company persuaded 167 branch managers to return to work, 20 managers returned on March 27th. And suddenly, the union went to Mokpo with remained managers. Executives, the vice president and the sales directors visited Mokpo to persuade them, they left to Jeju-Do. Union and branch managers kept avoiding. Even families visited them but they avoided meeting. [divide and rule]
He claimed “ every time conflict happened, the union president did not come to the front and entrusted the matter to Korean Federation of Clerical & Financial Labor Union.” And “ The union draws upper union to our matters” doubted he that upper union made the matters bigger [distort]. He also said,” Seeing the former example of Mirae Asset Life, if the union occupied the head office building, it would go into long-term strike so, the company was compelled to hire the guards to protect the building [deceive, delay].

On April 24th 2008 the secretary-general of EUCCK, Jean-Jacques GRAUHAR sent the letter to the president LEE Myung-Bak, the chairman of the National Competitiveness Council SA Gong-Il, the Parliamentary Chief Secretary PARK Jae-Wan, the Chief Secretary of social policies PARK Mi-Suk and claimed that the strike of Allianz Korea was illegal and asked Government’s aggressive intervention emphasizing on company’s damage (Financial damage and decrease of public image) and expressing regret over Government’s passive action to branch managers illegal strike.[dominate]

Union members of Allianz Life got serious injuries by hoodlums who were hired by Allianz Life Korea

2008-08-11T15:36:00.000-07:00

Union members of Allianz Life got serious injuries by hoodlums who were hired by Allianz Life Korea and were transferred to hospital.

Hoodlums of Allianz Life Korea are assaulting union members and stripping them naked trying to establish strike tents in front of headquarter in Yeouido of Seoul at 28th afternoon.

Allianz Life Insurance Cuts 100 Jobs(The North American insurance company)

2008-08-10T17:25:00.001-07:00

source : http://revver.com/video/1094689/allianz-life-insurance-cuts-100-jobs/

Allianz Life Insurance Company plans to eliminate 100 jobs from their workforce. A spokeswoman for the North American insurance company says the tough economic climate has brought them a decline in annuities sales. They are also eliminating 40 job openings and additional temporary jobs at their Golden Valley Headquarters. Affected employees will receive severance packages and job placement services. This is the second time in two years Golden Valley has been hit with layoffs. In 2006, new laws governing how annuities are sold forced the company to cut 200 jobs. Large insurance companies have come under fire in recent years for the way they sell annuities. In February, Allinaz was forced to pay $10 million to settle charges they sold unsuitable annuities to seniors throughout California. The company also settled a similar suit in Minnesota last fall. The insurance company is a subsidiary of German financial giant Allianz AG. http://www.EmploymentCrossing.com

Status of ethical management in Allianz Life Korea regarding recent strike

2008-08-10T17:23:00.000-07:00

source : “Multinational Corporate Social Responsibility”(Especially about Allianz Life Korea case)by KANG Su-Dol (Professor of Korea University)

Failure of building trust between Labor and Management – Neglecting inside customers, Deficiency of advanced management

The conflict of Allianz Life Korea came outside with ‘the implementation of performance related pay’ on January 21st 2008. Labor & management agreed about the introduction of performance related pay in 2005,2006 but the final model of pay system was not agreed. Negotiation of wages was linked with negotiation of performance related pay; the company raised 3.5% of pay additionally in 2006 in terms of giving up the allowance of monthly leave eternally. Allianz Korea had the freezing of wages in 2004, raised 14% in 2005 and 8% in 2006 (including 3.5% compensation for the waiver of allowance; 11.5% in 2006). Average raise of 3 years (2004~2006) is 7.3% of basic pay. But the company included 3.5% compensation for the waiver of allowance and made average rate of 2 years (13% per year; 2005~2006) and claimed that it raised the basic pay very much for the implementation of performance related pay.

So, Labor Union indicated the problems of company’s suggesting performance pay system and tried to get to the agreement by negotiation. But the company compulsorily applied 7.5% raise for the wages of 2007. Without agreement of Labor Union, the company insisted to pay the salary discriminately dividing into 5 grades of employees’ performance. Labor Union could not agree with this idea. Despite a lot of meetings for the renewal, union and company had never made agreement. So the union applied for the mediation in a labor trouble of the National Labor Relations Commission on April 23rd 2007, The National Labor Relations Commission decided to end the mediation without suggesting any proposal because of big difference between labor and company on May 14th.After the end of mediation, over 20 times negotiations were proceeded during May 15th ~ November 14th 2007. But the company insisted consistently that there could be negotiation only after setting the introduction of performance-related pay as a premise. So the union put to the vote for strike for two days (November 20~21 2007) about “the renewal of collective agreement, productivity bonus and regular promotion”. 1,008 union members out of 1,086 on the resister voted and 95.5% of the voters were agreed for strike. Union reported the strike to the south branch office of Seoul Regional Ministry of Labor. After that, union started the struggle of a work-to-rule and picketing.

On the process of this, the company concluded that the union abused the right of Agreement [distort] and the company announced the CEO message on January 17th and implemented compulsorily the performance-related pay without agreement of union on January 21st 2008. The performance related pay of Allianz Korea divides employees’ performance into 5 grades and pay the salary differently for each grade. But the labor union went into the strike pitching tents at headquarter, underground parking lot against the compulsory implementation of performance related pay: ’discriminated pay of basic salary & performance bonus’. The strike came into the spotlight because it was the first large-scale strike since the president LEE Myung-Bak government.
The company claimed, “the withdrawing of performance-related pay was the essential part for control of the company and could not be the object of strike” [deny, deceive]. The company insisted that “the conflict for power could not be settled by strike” [dominate, distort] and also claimed that “the mediation of the National Labor Relations Commission and the vote of union members was not for the withdrawing of performance-related pay that was pointed as the main reason of the strike by union so the strike was out of order” [deny, distort].

Allianz Life Korea Moral Management

2008-08-10T17:22:00.000-07:00

Allianz Life Korea held ‘Proclaiming ceremony of moral management’ to clarify the strong will of moral management on February 7th, 2002. All executives and compliance officers of Allianz, FSS and Samsung Life as well as Michell Kanbianue attended in the ceremony. In the ceremony, the president Michell Kanbianue and executives of Allianz Korea signed on the pledge to swear for ‘all the parties concerned’ that they will try to make the highest ethical level company.
"I swear that Allianz Life will take the ethical management as the important foundation of management and moral & law-abiding program like ethical standards made by compliance department will be the support for customers, shareholders and employees to act clean and morally" said the president Michell Kanbianue and emphasized the observance and practice of it.
The concrete programs to practice the ethical management of Allianz Life consist of three major system; First-ethical standards, second-Allianz whistle, third-the Charter of customers right.

The managements of Allianz Korea are still controlling the employees on strike by organized violence of hoodlums

2008-08-07T20:06:00.000-07:00

Allianz Korea is on strike for 199 days.Background of strike with Allianz SE in South Korea(1)

2008-08-07T15:28:00.000-07:00

source : “Multinational Corporate Social Responsibility”(Especially about Allianz Life Korea case)by KANG Su-Dol (Professor of Korea University)

Allianz Life Korea started its business after German Allianz Group, 118 years history and one of the biggest worldwide financial service group, took over the 45year-old Jeil Life Insurance in July 1999. Allianz Group is a multinational enterprise with its headquarter in Munich advancing into 70 more countries including Europe, America, South America, Asia Pacific area, Mid-east Asia and Africa. Allianz became the worldwide insurance company by conducting merger and acquisition of French AGF in 1997, Korean Je-il life insurance in 1999, German Dresden bank in
2001.

And Allianz Group has 280 subsidiary companies all over the world and hires 174,000 employees and is providing insurance & financial services to more than 60 million customers.

Allianz Group is the 6th largest - asset enterprise in the world and the first insurance enterprise in the world. In the end of 2006, total asset of Allianz Group is 1052.3 billion Euros (about 1,300,000 billion KRW) [table].

This is 1.5 times of Korean GDP and 5 times of total asset of Korean life insurance market. Total sales of Allianz Group in FY2006 was 101.1 billion Euros (124,000 billion KRW: exchange rate of end of 2006) and net profit was about 7 billion euros (about 8,500 billion KRW)

Standard &Poor’s (S&P) adjusted credit grade of Allianz group and other major subsidiary companies upward from ‘AA-’ to ‘AA’. ‘AA’ is the third highest grade of S&P 22 grades. Short-term grade of Allianz Group was ‘A-1+’ and all subsidiaries credit forecast was maintained with ‘stable’. These results of credit valuations show objectively that Allianz Group is healthy in financial aspect and a reliable financial company.

[table]Allianz Group Financial figures

Item	€,%	FY2006	Increasing rate(%)	FY2005
Total sales	€ million	101,129	0.2	100,967
Operating profit	€ million	10,386	29.8	8,003
Nonlife insurance	€ million	6,269	21.9	5,142
Life/health insurance	€ million	2,565	22.5	2,094
Bank	€ million	1,422	102.0	704
Operating assets	€ million	1,290	14.0	1,132
Pre-tax profit	€ million	1,0323	31.9	7,829
Net profit	€ million	7,021	60.3	4,380
Equity capital	€ million	50,481	27.8	39,487
Total assets	€ million	1,053,226	6.5	989,288
After-tax ROE	%	15.6	3.0pts	12.6
Before depreciation ROE	%	15.6	3.0pts	12.6
Earnings per share	€	17.09	52.0	11.24
Other investment assets	€ million	763,855	2.8	742,937

*Source: Allianz Group Homepage.

After the launch of Korea in July 1999, Allianz Korea reduced its 1000 employees (40%) and more than 6000 insurance agents (50%) through twice big reconstruction and shutdown of sub-branch offices. On the other side, the executives have been increased by 240% from 13 in 1999 to 31 now. This proves Parkinson’s Law. Allianz has reduced its employment for the slim organization since its launching in Korea. Recently, Allianz had the suspicion of tax evasion regarding with illegal operation of variable insurance even in profitable year and it is difficult to have companionship with labor union.

Allianz Life Korea has 5 regional offices, 39 branches, 265 branch offices and 20 PA (Professional Advisor) branch offices at the present of June2008. 1,600 employees and 5,000 insurance agents (AA) are managing more than one million customers. Allianz Korea runs various channels like PA, Bancassurance, CA besides Allianz Advisor channel to provide the tailor-made insurance, financial plan and financial service to customers having different needs and preferences.

Allianz Life Korea suffered 197.6 billion KRW losses in 2002, 36.1 billion losses in 2003 after launched in 1999. But sales was better, Allianz Korea gained 174.3 billion KRW profit in 2004, 75.6 billion KRW profit in 2005, 47.4 billion KRW profit in 2006 and in 2007, gained 202.3 billion KRW profits in sales. Allianz Life Korea made the powerful position as a leading life insurance company with 9,000 billion total assets, 2,400 billion total insurance premiums and 230% of BIS

Worldwide multinational enterprise, Allianz Group claims to stand for several ‘leadership values’. It is that ‘Align strategy and communication’, ‘Promote a High Performance Culture, ‘Focus on Our Customers, ‘Develop Our Employees’ and ‘Build on Mutual Trust & Feedback’

In conclusion, Allianz Group will achieve the strategic goal and be the most desirable enterprise by building on mutual trust & feedback and high performance culture with the basis of focusing on customers and development of employees.

Allianz Life Insurance Co. of North America is cutting 100 workers from its ranks.

2008-08-07T15:27:00.000-07:00

source : business journal
Wednesday, August 6, 2008 - 9:04 AM CDT | Modified: Wednesday, August 6, 2008 - 9:53 AM
Minneapolis / St. Paul Business Journal - by Carissa Wyant Staff Writer

Allianz Life Insurance Co. of North America is cutting 100 workers from its ranks.

A tough economic climate has hurt the company’s bottom line, a company spokeswoman said, citing a decline in annuities sales for the insurer.

The subsidiary of German financial giant Allianz SE is trimming about 4 percent of its staff at its Golden Valley headquarters. It has also eliminated an additional 40 job openings and some temporary positions. The cuts will come from positions in various areas.

Employees who will be affected were notified Tuesday. The employes being laid off will receive severance packages and job placement services.

Allianz Life now employs about 2,300 workers.

cwyant@bizjournals.com | (612) 288-2108

Strike of Allianz Korea

2008-08-07T15:26:00.000-07:00

Allianz life Korea is on strike for 198 days

Employees of Allianz Korea have been on strike against a system of performance related pay that is not covered by the applicable collective agreement.

Together with UNI Global Union, Allianz Life Korea Union, ver.di, demand that Allianz:

.reinstates the 92 sales branch managers that Allianz Korea dismissed unlawfully
for exercising their right to join a union and to go on strike.
.withdraws the performance related pay system Allianz Korea introduced unilaterally
in breach of its valid collective agreement.
.returns to the bargaining table to negotiate a mutually acceptable performance
related pay system with the union as foreseen in the applicable collective
agreement.

1,000 union members out of 1,300 are on strike against its management disruption, ignorance of Korean labor law & Collective Agreement and against suspicion of illegal operating customer’s assets. Union members are also on strike to make Allianz Korea protect their customer’s asset and be clean and ethical. (There are total 1,300 union members out of 1,700 employees in Allianz Korea)

Allianz Life Korea is on strike for 198 days.
German multinational group, Allianz Korea reduced its employees rather than creating employments and did tax evasion to maximize the profit of shareholders by disregarding for its social responsibilities and ethics. Is this understandable?

Allianz Korea prevented employees who demanded to respect the Collective Agreement legally from entering the company building by using gangsters and fired 100 employees and made the president of Labor Union & one union member arrested. Even more, Allianz Korea, financial service company, closed the company and established the steel structure around the Head Office building related to the company closure. If one company leaves their employees on the street ignoring their lawful demands for 5 months, is it a good and sound foreign company?
This kind of anti-national, anti-business company has to be punished by Korean Law, the management who committed illegal activities has to be punished and resigned.

The management has to make wise decision for the settlement of strike not to damage their customers as soon as possible.

But Allianz korea hire a hoodlums to break a strike.
Union members of Allianz Life got serious injuries by hoodlums who were hired by Allianz Life Korea and were transferred to hospital.

The union of Allianz Life established the containers in front of the headquarter to secure the strike area at 4 AM of 28th after hoodlums destroyed the strike tents and took struggle goods last 26th.And in the afternoon hoodlums hired by Allianz Life Korea offered violence to union members who tried to establish tents.

One male union member bled badly at his left eye because of hoodlums’ignorant and uncouth violence. Strongly struggled 4 female union members also got injuries. And many union members got big & small wounds being pushed and tumbled by hoodlums.

Hoodlums pulled the hair or gripped the arms or legs of union members and threw them regardless of sex. Injured 5 union members were transferred to St Mary’s Hospital in Yeouido and got first aid treatment.

※ About Allianz Life Korea

Allianz Life Korea, German Multinational Company, started its business by taking over the First Life Insurance in 1999. First Life Insurance was the 4th Insurance Company of Korea with 2,700 employees, 13 executives, 13,000 insurance agents and 650 sub-branch offices. After launched, Allianz Korea kept disruption and arbitrary management by ignoring the local feelings. And Allianz Korea through twice big reconstruction reduced 1,000 employees (40%) and 8,000 insurance agents (65%) and shut down its sub-branch offices by 60%, so there are 265 sub-branch offices now. On the other side, the executives have been increased by 240% from 13 in 1999 to 31 now. This cannot be acceptable with the national spirit.

UPDATE:Allianz 2Q Net Profit -29%;Cuts '08,'09 Operating Profit Guidance

2008-08-07T15:24:00.000-07:00

Wednesday August 6th, 2008 / 22h50

(Updates with more detail, quotes, background)
By Ulrike Dauer Of DOW JONES NEWSWIRES FRANKFURT -(Dow Jones)- Allianz SE (AZ) late Wednesday reported a 29% decline in second-quarter net profit on new markdowns related to the financial crisis, which drove the group's banking arm into the red for the fourth consecutive quarter but also hit the insurance and asset-management operations.
Allianz, Europe's largest insurer by gross premium income, also cut its operating profit outlook through 2009 saying it expects the "difficult market environment to continue to 2009," and that the targeted annual 10% rise in operating profit through 2009 is impossible to reach, as "expected market conditions (make) accurate earnings predictions, especially for banking, not feasible."
It said, though, that "underlying operating profitability in insurance and asset management is stable enough to generate a run rate before banking of EUR9 billion plus in 2008 and 2009."
"The tough market environment has exerted pressure on our second-quarter results," said Chief Executive Michael Diekmann. "However, the fundamentals of our business remain strong and we were able to deliver a solid performance. In addition, given our solvency ratio we feel very comfortable with our capital position."
Second-quarter net profit fell to EUR1.52 billion from EUR2.14 billion in the year-earlier quarter. It was better than EUR1.29 billion net profit that 16 analysts polled by Dow Jones Newswires forecast on average.
Total revenue was down 9.5% at EUR22.0 billion from EUR24.3 billion and below the forecast EUR23.4 billion. Operating profit fell 36% to EUR2.10 billion from EUR3.29 billion, below the forecast EUR2.14 billion.
The insurer attributed most of the drop to the financial crisis, which caused another EUR286 million in mark-downs on the ABS trading book of its banking arm Dresdner Bank, after EUR845 million in the first quarter, a trading loss of EUR627 million, compared with a trading profit of EUR351 million, and a substantial decline in operating banking revenues.
The group's banking operations, to which Dresdner Bank contributes some 96%, posted a quarterly net loss of EUR552 million, up from the EUR513 million net loss in the first quarter and substantially weaker than the EUR411 million profit in 2Q 2007.
Analysts had forecast a second-quarter net loss of EUR282 million at the banking operations.
The financial crisis also hurt revenues in the life insurance business and, in particular, in unit-linked life insurance products.
Investors have been wary about Allianz's second-quarter results ever since July 25, when Allianz's reinsurance peers Munich Re AG (MUV2.XE) and Hannover Re AG (HNR1.XE) warned on full-year profits. Munich said notably the value of its stock portfolio has taken a hit from the protracted financial crisis, while Hannover Re warned that its full-year targets are now more difficult to reach. Several analysts had expected Allianz to acknowledge that it is impossible to reach the targeted operating profit rises this year and next.
Allianz, which was scheduled to report second-quarter earnings Thursday, released the main quarterly figures late Wednesday. Analyst and journalist conference calls are scheduled for Thursday.
Analysts are now eyeing an update on the planned sale of Dresdner Bank. The bank, which Allianz bought in 2001 for around EUR24 billion, is in the process of legally separating its retail banking operations from the investment bank, which will likely be completed at the end of August. It has said it is doing so in order to be able to particpate in German banking consolidation.
Allianz shares closed down EUR1.07, or 0.9%, at EUR112.98 Wednesday, underperforming the wider market, which closed up 0.7%. In post-market trade, the shares were trading in a EUR110.29-EUR110.56 range, down 4.1% from Tuesday's close. The shares have fallen around 23% year to date, valuing the company around EUR51 billion.
Company Web site: www.allianz.com
-By Ulrike Dauer, Dow Jones Newswires; +49 69 29725 510; ulrike.dauer@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=osDKffEcbAakbsqNEFrwXg%3D%3D. You can use this link on the day this article is published and the following day.

source : easybourse
Wednesday August 6th, 2008 / 22h50 Source : Dowjones Business News

http://www.easybourse.com/bourse-actualite/allianz-se/updateallianz-2q-net-profit-2-prc-cuts-08-0-operating-DE0008404005-501784

China Bank Seeks Western Investments

2008-08-07T15:23:00.000-07:00

By RICK CAREW, EDWARD TAYLOR and DANA CIMILLUCA
August 6, 2008; Page C3

Burned and chastened by previous Western investments, China Development Bank nevertheless appears to remain on the prowl.

The Chinese policy lender, which funds government goals and projects, held preliminary talks with Germany's Allianz SE to acquire its Dresdner Bank unit about two to three months ago, said people familiar with the matter.

The talks aren't likely to result in a deal for the German bank, though, because of interest from other European bidders and expected political resistance to a Chinese buyer, several of these people said.

Spokesmen for Allianz and Dresdner declined to comment. A spokeswoman for China Development Bank couldn't be reached. The talks were reported Monday night by Bloomberg News.

Allianz is currently in the process of legally separating the retail- and investment-banking arms of Dresdner Bank, a process it hopes to complete by the end of August. Investment bankers are watching for earnings at Allianz, to be released Aug. 7, to help gauge a valuation for Dresdner Bank in any potential deal. Given current market conditions, valuation levels for Dresdner Bank vary widely, from around €7.5 billion ($11.7 billion) up to €15 billion, people familiar with the matter said. Another person added that the price CDB offered was unlikely to be high enough to win Dresdner.

Chinese institutions have been looking at opportunities to take stakes in foreign financial institutions to diversify their revenue sources. In the case of Western investments, they also hope to gain an inside look at how more-mature banks tick.

Write to Rick Carew at rick.carew@wsj.com, Edward Taylor at edward.taylor@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

source : THE WALL STREET JURNAL

Allianz Korea is on strike for 197 days.Multinational Corporate Social Responsibility

2008-08-06T15:28:00.000-07:00

Allianz Korea is on strike for 197 days

3. Corporate irresponsible response: ‘6D strategy’ & ‘3C tactics’.KANG Su-Dol (Professor of Korea University)

Even the social pressure to Corporate Social Responsibility is growing; corporations do not always conduct self-responsibility with soundness. They usually cope with 6D strategy. First-Deny, second-Delay, third-Dominate, forth-Distort, fifth-Deceive, sixth-Divide; those are the 6D strategy
First, Deny is that corporate denies the existence of responsible objects or situation. Even though the responsible situation exists, corporate usually denies the casual relationship or passes the buck.
Second-Delay means when corporation cannot deny the existence of responsible objects or situation any more, then insisting that solution of it is too early to conduct। Corporation claims that the problem is not much serious or it is not capable to solve it. Corporation killing time waits for disappearance of resistance. And after that, it accomplishes its intention properly packed.

Third-Dominate is that corporation want to have the leadership about the problem if it is impossible to deny or delay. Corporation makes the analysis of responsible situation more favorable to them or invites scholars and experts in their side and draws the conclusion being advantageous to corporation. So a misfortune turns into a blessing. Corporation in the serious crisis can thrive more because of Dominate-strategy.
Forth-Distort is that corporation distorts the situation and emphasizes not the essence of problem but the compensation. At the beginning doing or not doing is the main issue but it goes to the compensation in the end especially in construction cases or development cases.
Fifth-Deceive is that corporation seems to observe the democracy in process throughout experts meetings but actually deceives people with the bribe, influential post and secret actions. Manipulating documents, data, statistics and figures is common.
Sixth-Divide is that corporation divides and rules. Corporation isolates the people speaking the problems and prevents the problems to being spread. Usually, corporation makes the victim and punishes him terribly. It makes other people scared and do nothing.
In the light of past experience, deny, deceive, delay, distort, dominate and divide; these 6D strategies are often used at the same time. And these strategies have no priority or orders, so it can be used with the mixed.

Meanwhile, the conscience power and citizen groups are alive and many campaigns are powerful so corporations cope with them actively by 3 tactics.
One is the corruption tactic. They pay the money calling PR expense or bonus. Press usually calls it ‘lobby’. But the essence of the money is the bribe. Difference between the bribe and the gift is the compensation. Real gift is from heart. But the bribe is to offer the materials for the compensation back.
Second is the cooptation tactic. For example, Samsung offers the department manager position to the prosecuting attorney investigating them. Many political parties give the attractive position to the people bothering them and make them silent against them.
Third is cooperation tactic. It leaves the opposite group being independent and makes them collaborators or partners with corporate relationship. It is mostly said one hand washes the other and ‘win-win’ for both. But it is win-win only for them and in fact it scarifies other people of society to satisfy only their own appetites. The sad thing is that relatively critical side joins the big project of corporation as ‘a critical adviser’ and becomes ‘an alibi’ for the corporation. In this case, the original grass-roots resistance becomes purified and buffed under the control of the critical adviser. ‘The enemy becomes our force and our force becomes the enemy’ on the stage of ‘cooperation’.