1. Group A5 Martha Isabel Andersson Erika Bulger Marianne Myrberg Behavioural Management Control ME 2028

2. 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

3. 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”

4.  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.

5.  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.

6. Corporate strategy:  Decentralisation  Subsidiary manager empowerment  Entrepreneurship

7. 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

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

9. 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

10. 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. 