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The Prudential Insurance Company of America is one of the largest diversified financial institutions in the world and, based on total assets, the largest insurance company in North America. Along with its primary business, insurance, the company also operates in securities, investments, residential real estate, employee benefits, home mortgages, and the corporate relocation industry. In 1999 Prudential was in the process of reorganizing as preparation for a transition to demutualization and public ownership, pending regulatory approval, in 2000.

A New Era of Decentralization in the 1940s

In 1946 Prudential entered a new era. Carroll M. Shanks took office as Prudential's seventh CEO. At 40, he was the youngest president since Dryden. Shanks had joined Prudential in 1932 and was known for his unorthodox methods; during his 15 years as president, he remade the company, leading Prudential into a bold decentralization that stunned the industry.

Within months of Shanks taking office, resignations or early retirements were announced down to the level of middle management. Next, in 1948, he opened regional home offices across the nation, each with its own senior vice-president in charge and with total responsibility for the region. Newark retained the corporate senior officers, actuaries, and evaluation and staff departments, but each vice-president handled local sales, investments, general management, and issues from policy to claims.

The reorganization dealt with many of the company's problems. It attacked the excessive specialization that separated workers and stymied activity; it cut the many levels between the president and operating employees; it eliminated layers of red tape and provided new opportunities for energetic and creative managers. Each regional home office occupied a striking modern office building that dominated its city and told the region that Prudential had arrived in style and strength. Quickly the regional home offices helped Prudential establish a new national presence. Corporate policy called for the regional office to invest its dollars in the local community. With the inception of each of the eight home regional offices, Prudential's sales jumped and investment income rose sharply. In 1948, the first regional sales office in Los Angeles boosted revenue in that region by 20 percent. Group pension sales totaled $44 million in 1945, and, by 1955, exceeded $194 million; group life sales exceeded $589 million in 1949, a record for both Prudential and the industry.

As regional leaders exercised their autonomy, they created a multitude of new products, many tailor-made to their regional markets. Shanks adapted the best innovations to the national scene. Prudential set up employee security programs that combined group life and health insurance. In addition, it changed major medical insurance in the 1950s when it revised the method for computing the deductible. The company also underwent internal change. In 1951 Prudential's district agents voted to go on strike, the first formal job action by a white collar union in the nation. The American Federation of Labor led the workers for three months as they negotiated for improvements and succeeded in obtaining recognition of the union as their bargaining agent.---Source: fundinguniverse.com