Group A5Martha Isabel Andersson

Erika BulgerMarianne Myrberg

Behavioural Management ControlME 2028

Initial Analysis: No approach towards the possibility of

producing AR-42 in the Netherlands.

Important to be able to compare the extension production with the production in the new UK factory

The proposal reflects more of a competitive thinking than a corporate overall thinking

The Best Interest of Axeon: A new factory in England would

guarantee the supply of the AR-42 to the costumers in case of plant shut down.

Growing potential with a new subsidiary which will reinforce the decentralisation.

“Matter of key importance for the morale and autonomy of the subsidiaries”

Mr. Van Leuven’s behavior:In our opinion, Mr. van Leuven shows personal limitations and lack of motivation.

He probably felt unsure of taking such a big decision for the company, he does not want to take responsibility for his decisions and bear the consequences if something goes wrong.

Transfer price for AR-42: usual pricing: market- based and no

mandatory selling No market- based pricing in this case; costs will

decrease if the production increases to 1000 tons Production near full capacity

Marginal transfer pricing is possible Negotiation not an option due to the current

situation with many conflicts. Dual rate pricing seems to be best solution for

both sides.

Corporate strategy:

Decentralisation

Subsidiary manager empowerment

Entrepreneurship

Critical success factors: Extensive production line of industrial

chemicals High quality of products Knowledge and expertise; trained

personnel Core competence in production of AR- 42 AR-42 is a unique product

Key recurring activities: Accounting system Sales Transfer pricing Communication and negotiation

Centralisation/ Decentralisation in Axeon: Vision: decentralisation

Results control is implemented Rewarding system based on revenue Subsidiary manager empowerment

Risk of sub-optimization and politicizing In this case:

Centralisation shines through

Mr. van Lueven should: Implement tone at the top Trust in Ian’s capabilities Accept proposal: “ key importance for the

whole company […] because of its implications […] for the autonomy and morale of subsidiary management.