Behavioural Management Control Group C7 Alex Aizpurua Alice Nicod Constance Renard Guillaume Favreau Maxime Ernoult

Confusing! Undiscovered market in the UK? Too confident with the price, what is he going to do if he can’t sell everything? Difficult production and Ian doesn’t know too much about that Personal experience in ”Arregui S.A”. Always something goes wrong in a production line implementation process at the start phase.

Lose the control of the company Self pride feeling, a nationalistic feeling Focus only in one market; too much risk Reluctant to invest money in other factory Hidden reasons that we don’t reach Producing in Netherland -> decrease fixed &variable costs Extend the company More profits for the company Promoting decentralization

Axeon board of director meeting Friendly. ”Decision seems to be clear” 1 week Doubts appears : ask for justification on saleforecast Call to Ian 1 week 2nd meeting Distant and indecisive Mr Noble’s Letter Event 1 month Ask for more study What is he going to do ? Study conclusion Van Leuven behaviour WHY ? Respects company policy with subsidaries Make money High trust in Ian Fear of losing Mr Noble / Ian Becomes aware of the importance of the project Wants to be sure Listens his board of director Doesn´t know what to think Doesn´t want to disapoint anybody

Transfer Price Estimation ( £/ton) +-Concl Market Price (=Hollandwort h price) 2475 (with working capital 190K £ ) The same for hollandsworth. NO NegotiatedDepends Very efficient if high concurrency Negociation cost time. Accentuation of the conflicts. Unequal. NO (No bargainin g power) Marginal cost 2060 Easy to determine the final contribution generated by the product. Pb with responsility of the center. Few information on centers performance. NO (fixed costs not shared) Full cost 2460 (with working capital 160K £) Can see the viability. Easy to implement. Based on working cost estimation. No margin. YES Cost Plus 2952 (with 20% margin) Security margin Easy to implement. Based on working cost estimation.NO

Apparently High degree of decentralization Results Control Freedom & Autonomy of subsidiaries In reality Privileges the development of headquarters In the facts, Action Control Behavioral constraints

Freedom of initiative Creativity and inventiveness Managers motivated Results Control Management Huge potential market in the UK Internal Rate of Return : 20% in 4 ½ years Production of AR-42

Launch new projects:  Research, Development, Implementation, Production  Commercialization, Publicity  Precise processes must be established – Each member of Axeon must be aware of them Aim:  Get some new market share on new products  Increase competitiveness of Axeon’s subsidiaries on the global market  Get some quality’s standards and more transparency towards customers

DecentralisationCentralisation Geography One Holding with 24 subsidiaries Geography Assigned territories – Don’t act as same company’s subsidiaries Economy Each factory is responsible for its sales Economy Subsidiaries keep on being minoritory regarding the holding company Decision Power Commission to each factory’s manager Decision Power Every final decision is made by the C.E.O (Anton von Leuven) A decentralised company with a centralised management

1. Start shipping from Holland – Risky strategy on a long term period with uncontrollable extern factors Rising oil prices  high shipping costs Rising raw material prices  high manufacturing costs for AR-42 products 2. Sales assessment to evaluate if they could reach their objective of 400 tons. 3. Buy or build a subsidiary in UK  follow Axeon’s strategy about decentralisation He should follow Axeon’s Strategy (in term of decentralisation)